The Cromford Report – Daily Observations May 2018

    May 31 – We look once again at how the Cromford® Market Index has changed for the single-family markets in the 17 largest cities:

    Sellers have benefited since last week with 10 cities showing an improving situation for sellers and only 7 showing deterioration.

    Many of the improvements are quite large including:

    1. Fountain Hills – up 12% because of higher sales and lower inventory
    2. Maricopa – up 11%
    3. Cave Creek – up 10%
    4. Surprise – up 8%

    The deteriorating markets saw lower percentage changes, the highest being -7% for Glendale

    One slightly disturbing aspect of this table is the continuing decline of Phoenix, which represents 25% of the market by units. The annual sales rate has started to fall in Phoenix and supply has been more resilient than in many other areas. Average and $/SF prices have shot up over the past several weeks which may be having a slightly dampening effect on latent demand. Sellers need to be wary of getting over-confident in this situation.

    May 30 – The second Zillow purchase was recorded today – 22734 N 123rd Dr in Sun City West – a 5 bedroom 2 story detached home built in 2011

    They paid $312,000 (excluding any seller fees deducted from this amount) for this home with a Zestimate of $317,114.

    It is not currently shown as coming soon or for sale, but the sale to Signpost Homes is shown at the Zillow site.

    May 29 – Despite reports of Greater Phoenix’s housing market being “over-valued” (e.g. CoreLogic), we expect prices to continue rising while the Cromford® Market Index remains over 110. The CMI compares demand with supply and throughout its existence has always given us at least 3 to 6 months warning of any shift in pricing trends. Despite many fears, the housing market always gives plenty of warning before major changes occur, as long as your are paying attention and do not believe “it’s different this time”.

    In the chart below you can see the CMI collapsed in 2005 long before prices started falling. The CMI exceeded 100 in early 2009 showing that it was safe to enter the market again. The sharp drop in the CMI in late 2013 warned us that appreciation rates would fall, but because it did not drop far below 100 they never became negative.

    The CMI is currently well over 150 and would need to see another collapse below 100 before prices have any significant chance of declining.

    May 28 – It takes longer to analyze new home sales because the vast majority of them do not appear in the MLS and we have to wait for the recorded deeds to be transcribed from images, entered, verified and corrected. Only then can we tally up the numbers with some accuracy. The new home numbers for April are quite surprising.

    • There were 1,425 new single-family closings, up only 2% from April 2017. Since April 2018 had a 5% advantage in working days (21 over 20), this is an unexpectedly weak number.
    • Single-family dollar volume was down 1% compared to April 2017, largely because the average new home was 6% smaller than in 2017

    Although new single-family home numbers were unexpectedly weak, new townhouse / condos were unexpectedly strong.

    • There were 166 new townhouse / condos recorded, up from 132 in April 2017
    • New townhouse / condo dollar volume grew 66%, up from $49 million to $81 million
    • The average new townhouse / condo price was $485,459, up from $367,921 a year ago

    Clearly there is a lot of growth in luxury condos:

    Optima Kierland had 29 closings at an average price of $977,688 and an average price per sq. ft. of $741, more than 4 times the overall average price per sq. ft. for the valley. This was by far the biggest contributor to the surge in dollar volume. Most of the buyers were from Arizona, though 3 were from California and 1 each from Alaska, Kansas, Connecticut and Colorado.

    Other condo developments selling in volume during April 2018 were

    • Aire on McDowell
    • Cays at Downtown Ocotillo
    • Che Bella Villas
    • Contour
    • Copper Leaf
    • Enclave at Borgata
    • Rhythm
    • Terrace at Green Gables
    • Toscana Vacation Suites (all buyers were out-of state)
    • Villages at Aviano
    • Villages at Country Club
    • Villagio at Happy Valley

    May 25 – Once again we publish below the Cromford® Market Index for single-family markets in the 17 largest cities.

    This shows 8 cities improving for sellers and 9 deteriorating. However the situation is a little more positive for sellers than last week.

    The major improving cities are Cave Creek, Fountain Hills, Maricopa and Avondale. Going in the other direction are Goodyear, Glendale and Tempe. Phoenix is also slightly losing steam with a growing inventory. Things are looking up in Scottsdale and Surprise.

    This is still a strong seller’s market with 4 cities over 200 and only 1 city lower than 110.

    May 24 – Zillow has created the subsidiary Signpost Homes Inc. to operate its home buying and selling business, which was approved by the Arizona Corporation Commission on May 1. Their first acquisition was recorded on May 18 – 6630 S Nash Way in Chandler 85249. This was purchased for $410,000. The affidavit of value states the transaction was all cash and that the buyer intends to use the property as a non-primary or secondary residence. Fidelity was the title company.

    The home is listed as “coming soon” on the Zillow site with an “expected on market” date of May 29. The asking price is $425,000. The current Zestimate is $412,568. It had previously been listed for $425,000 on ARMLS since March 16, and this listing expired on April 30.

    Zillow’s buying price appears to be very close to the Zestimate and it also appears that Zillow will make 2% gross margin if the home sells for the typical 98.7% of list price for Chandler.

    May 23 – The US Census Bureau has just released permit counts for the month of April and all 10 of the charts in the Cromford Public section of the web-site have been updated accordingly.

    In Maricopa and Pinal counties, we see a total of 2,185 single-family permits. This is the highest monthly total since June 2007 and a 19% increase over April 2017. Clearly the builders are planning to compensate for the shortage of re-sale inventory.

    The annual rate for single-family permits has risen to 21,163, up 12% from 18,893 this time last year. the year-to-date total in 2018 is 7,334, up 11% over 2017 but still 35% below 2007, which was a year when the market was in the process of collapsing.

    Although permit levels are increasing, the rate of change is insufficient to have a big impact on the overall shortage of homes for sale. It is however swinging the balance of supply between new and re-sale in favor of new.

    May 22 – This is the last installment of our series on days of inventory. Today we list the ZIP codes with relatively high days of inventory:

    1. Phoenix 85016 – 149
    2. Superior 85173 – 158
    3. Wickenburg 85390 – 164
    4. Scottsdale 85255 – 173
    5. New River 85087 – 180
    6. Phoenix 85004 – 180
    7. Valley Farms 85191 – 182
    8. Carefree 85377 – 215
    9. Scottsdale 85266 – 225
    10. Morristown 85342 – 239
    11. Rio Verde 85263 – 252
    12. Casa Grande 85193 – 255
    13. Paradise Valley 85253 – 268
    14. Arlington 85322 – 304
    15. Scottsdale 85262 – 315
    16. Stanfield 85172 – 365
    17. Fort McDowell 85264 – 438
    18. Aguila 85320 – 730

    Some of these (85172, 85173, 85191, 85193, 85264, 85320, 85342) have fairly small numbers of active listings, but their annual sales rates are extremely low, so sellers must be very patient.

    Others are quite large but have far higher inventory levels than the rest of the valley.

    Apart from scattered tiny communities in Pinal County, this list mostly comprises places that are in the North, such as Wickenburg, Morristown, North Scottsdale, Carefree, Rio Verde, Fort McDowell. We also see relatively central but expensive locations like Paradise Valley and Phoenix 85016.

    If you are tired of sellers who are too big for their boots, go visit Aguila or Fort McDowell. Not many homes to choose from (14 and 6 respectively) but at least the sellers will be pleased to see you. The nearest we have to that situation in the larger and denser locations is Scottsdale 85262. With 485 active listings and a sales rate of only 562 per year, you should find more respect for your offers.

    May 21 – Today we are resuming our analysis of days of inventory by ZIP code. We have so far covered 90 ZIP codes with days of inventory at 70 or lower. Now we look at those between 71 and 140.

    1. Phoenix 85045 – 71
    2. Tempe 85281 – 72
    3. Wittmann 85361 – 73
    4. Phoenix 85028 – 73
    5. Phoenix 85048 – 73
    6. Goodyear 85338 – 75
    7. Mesa 85207 – 75
    8. Glendale 85310 – 76
    9. Tempe 85284 – 78
    10. Litchfield Park 85340 – 79
    11. Tonopah 85354 – 81
    12. Waddell 85355 – 82
    13. Phoenix 85014 – 83
    14. Buckeye 85396 – 83
    15. Phoenix 85006 – 87
    16. Phoenix 85007 – 88
    17. Scottsdale 85251 – 88
    18. Scottsdale 85260 – 89
    19. Goodyear 85395 – 90
    20. Phoenix 85013 – 90
    21. Phoenix 85021 – 91
    22. Phoenix 85083 – 92
    23. Anthem 85086 – 96
    24. Phoenix 85085 – 98
    25. Surprise 85387 – 98
    26. Scottsdale 85298 – 100
    27. Apache Junction 85119 – 104
    28. Peoria 85383 – 110
    29. Phoenix 85054 – 115
    30. Fountain Hills 85268 – 117
    31. Casa Grande 85194 – 122
    32. Phoenix 85018 – 124
    33. Gold Canyon 85118 – 130
    34. Scottsdale 85259 – 132
    35. Black Canyon City 85324 – 132
    36. Congress 85332 – 133
    37. Phoenix 85012 – 134
    38. Eloy 85131 – 135
    39. Cave Creek 85331 – 138
    40. Phoenix 85003 – 139

    Relative to the rest of the valley we are seeing more inventory available in the North Valley (e.g. Anthem, New River, Black Canyon City, Cave Creek, Phoenix 85085 and 85083).

    Some of the central Phoenix ZIP codes are relatively well-off for supply (85003, 85012, 85013 for example)

    East Apache Junction (85119) has far more supply than the west (85120).

    May 18 – We interrupt our series on inventory numbers to post the latest table showing the Cromford® Market Index for the single-family markets in the 17 largest cities:

    Here we see 8 cities showing improvement for sellers while 9 cities show deterioration. The general trend has improved since last week, from a seller’s perspective.

    There are 4 cities showing a strong improving trend:

    1. Fountain Hills – up 14%
    2. Cave Creek – up 14%
    3. Maricopa – up 11%
    4. Avondale – up 11%

    Avondale is the first major city to exceed 250 since the heights of the bubble.

    There are 5 cities showing significant deterioration over the month:

    1. Tempe – down 13%
    2. Goodyear – down 11%
    3. Glendale – down 8%
    4. Peoria – down 7%
    5. Chandler – down 6%

    Of these 5, Chandler is the only one which has changed direction and improved for seller’s over the past week. The 3 largest cities in the Southeast (Mesa, Gilbert, Chandler) are all over 200, reflecting very low supply.

    The City of Phoenix has seen supply grow over the past month, unlike most of the surrounding cities. However, Goodyear and Glendale have also seen supply growth, as have Peoria & Gilbert. Among the secondary cities, Anthem, Tolleson and Buckeye are the only ones with more supply than a month earlier. Anthem has experienced a major downtrend in its CMI over the past 5 months. It was measured at 208 in late December and is down to 111.8 this week.

    May 17 – Yesterday we listed the 40 ZIP codes with the lowest inventory relative to their annual sales rate. These ranged from 17 to 36 days of inventory (all very low). Today we are looking at the next tier of ZIP codes – those with between 37 and 70 days of inventory. This ranges from very low to much lower than normal.

    1. Phoenix 85051 – 37
    2. Peoria 85382 – 37
    3. Phoenix 85032 – 37
    4. Gilbert 85295 – 37
    5. Phoenix 85053 – 37
    6. Sun City West 85375 – 39
    7. Laveen 85339 – 39
    8. Mesa 85208 – 40
    9. Mesa 85206 – 40
    10. Mesa 85209 – 42
    11. Avondale 85392 – 42
    12. Mesa 85205 – 42
    13. Peoria 85381 – 42
    14. Buckeye 85326 – 43
    15. Glendale 85301 – 43
    16. Chandler 85226 – 44
    17. Phoenix 85042 – 44
    18. Glendale 85304 – 44
    19. Tolleson 85353 – 46
    20. Sun City 85373 – 46
    21. Phoenix 85023 – 48
    22. Surprise 85374 – 49
    23. Chandler 85249 – 49
    24. Mesa 85213 – 51
    25. Scottsdale 85257 – 51
    26. Phoenix 85034 – 52
    27. Arizona City 85123 – 53
    28. Scottsdale 85250 – 54
    29. Phoenix 85022 – 54
    30. Casa Grande 85122 – 55
    31. Gilbert 85298 – 56
    32. Queen Creek 85142 – 57
    33. San Tan Valley 85140 – 57
    34. Mesa 85212 – 58
    35. Glendale 85305 – 59
    36. Surprise 85379 – 60
    37. Surprise 85388 – 61
    38. Mesa 85215 – 61
    39. Coolidge 85128 – 62
    40. Phoenix 85044 – 63
    41. Glendale 85308 – 63
    42. Florence 85132 – 65
    43. Sun Lakes 85248 – 66
    44. Phoenix 85015 – 66
    45. Scottsdale 85254 – 67
    46. Maricopa 85138 – 68
    47. Surprise 85378 – 69
    48. Phoenix 85050 – 70
    49. Phoenix 85008 – 70
    50. Phoenix 85020 – 70

    Here we are starting to see more expensive areas included in the table, such as 85250 and 85254.

    The overall inventory for Greater Phoenix is 64 days. We consider a normal range to be 120 and 150 days, so inventory for all dwelling types across Greater Phoenix is roughly half of what would be considered normal.

    May 16 – While inventory is low for the market as whole, some areas are much worse than others. In general the lowest priced areas have the weakest supply, but there are anomalies and exceptions. We are going to compare ZIP codes by days of inventory – the active listing count (excluding UCB and CCBS) divided by the annual sales rate and multiplied by 365 (the number of days in a year). For this analysis we are including all dwelling types.

    Here are the 10 ZIP codes with the lowest days of inventory as of May 16:

    1. Phoenix 85035 – 17
    2. El Mirage 85335 – 18
    3. Mesa 85202 – 21
    4. Phoenix 85033 – 22
    5. Mesa 85203 – 23
    6. Gilbert 85296 – 24
    7. Youngtown 85363 – 24
    8. Phoenix 85037 – 24
    9. Phoenix 85009 – 25
    10. Mesa 85210 – 25

    25 is an extremely low reading for days of inventory. All of the above are in West Phoenix, West Mesa or the El Mirage / Youngtown area, with the exception of 85296, which is rather more expensive

    The next group of 10 is as follows:

    1. Phoenix 85043 – 25
    2. Mesa 85204 – 26
    3. Glendale 85306 – 26
    4. Gila Bend 85337 – 26
    5. Tempe 85282 – 27
    6. Glendale 85307 – 27
    7. Tempe 85283 – 27 (includes Guadalupe)
    8. Chandler 85224 – 28
    9. Peoria 85345 – 29
    10. Phoenix 85040 – 29

    This is still mostly in the inner West Valley and the inner Southeast Valley

    The next group of 10 is:

    1. Chandler 85225 – 30
    2. Gilbert 85233 – 30
    3. Glendale 85303 – 30
    4. Mesa 85201 – 31
    5. Glendale 85302 – 31
    6. Phoenix 85031 – 31
    7. Gilbert 85297 – 31
    8. Phoenix 85027 – 32
    9. Chandler 85286 – 32
    10. Phoenix 85019 – 32

    This is a slightly more diverse group, but 32 days is still a very low number for days of inventory.

    The we come to:

    1. Apache Junction 85120 – 33
    2. Phoenix 85017 – 33
    3. Sun City 85351 – 33
    4. San Tan Valley 85143 – 34
    5. Gilbert 85234 – 34
    6. Phoenix 85041 – 34
    7. Avondale 85323 – 35
    8. Phoenix 85029 – 35
    9. Phoenix 85024 – 36
    10. Maricopa 85139 – 36

    A much more diverse group with a couple of more expensive areas (85234 and 85024). Still little chance of buyers finding a property without multiple offers.

    May 15 – Zillow is now active as our third iBuyer, though we have yet to see any deeds recorded in their name. This is normal as it would take several weeks before they close on their first purchase.

    Meanwhile our existing iBuyers have settled into patterns that have been fairly consistent over the past 6 months. During that period we see the following for Opendoor:

    • The average sales price was $236,438 with an average gross margin of $10,844 (4.6%) across 1,083 sales
    • Average turn round time between acquisition date and sales date was 97 days.
    • The maximum price paid was $490,000.
    • Their market share (excluding new home and distressed sales) was 2.3% for the 6 months and 2.8% for March 2018.

    The equivalent for OfferPad:

    • The average sales price was $245,752 with an average gross margin of $21,217 (8.6%) across 656 sales
    • Average turn round time between acquisition date and sales date was 108 days.
    • The maximum price paid was $700,500.
    • Their market share (excluding new home and distressed sales) was 1.4% for the 6 months and 1.3% for March 2018.

    So iBuyer sales exceeded 4% market share during March 2018, the last month for which we have verified data.

    Using unverified data we counted 309 iBuyer sales during April 2018, down from 390 in March. This suggests they slipped back to slightly under 4% of sales during April. However purchases were higher in April than March and they are off to a slightly faster start for sales in May with 116 closed during the period May 1 to May 11.

    Cerberus has slowed down a lot ,making only 26 purchases during the first 11 days of May.

    May 14 – The single-family market in the Northeast Valley has strengthened the negotiating power of sellers over the last 12 months. Two trends have worked in sellers’ favor. Supply, measured by the number of active listings without a contract, is down 14%, while the sales rate has increased. Monthly sales for April were up 12% while the annual sales rate has climbed 7%. The most interesting things is how these trends varied by price range.

    For supply, it is the range below $500,000 that was most affected with months of supply down from 2.1 to just 1.5 and a 31% drop in active listings. The range between $500,000 and $1 million was down 16% in active listings pushing our months of supply lower from 5.7 to 4.1. Over $1 million there was a drop in supply, but only by 5%. There is currently just under a year of supply over $1 million.

    For demand, the most impressive sales volume increase occurred above $1 million where the quarterly sales rate has jumped 32%. The range between $500,000 and $1 million rose a healthy 18%. The lower end under $500,000 was constrained by supply and saw a 5% fall in the quarterly sales rate.

    So supply has fallen most at the lower end of the market while demand has increased most at the higher end. In the middle, the combination of lower supply and higher demand is welcomed by sellers but makes life tougher for the increased number of buyers.

    May 11 – It has been a while since we last looked at what Canadians are up to in the Greater Phoenix housing market. The answer is – not a lot. In April 2018 the annual transaction count for Canadians across Maricopa and Pinal counties hit the lowest level since 2009. They represent only 0.9% of all transaction sides, their lowest percentage since our records for them began in 2009. At their peak in 2011 Canadians represented 2.5% of the market.

    The annual purchase count in April 2018 stood at 769 which represents a slight recovery from the low point of 564 in December 2016. However it is still a very low number compared with the peak of buying in December 2011 when we saw 4,340.

    Canadians have reduced the rate at which they are selling their Central Arizona homes to 1,640 a year, but that is still more than double their purchase rate. The peak exodus was August 2016 when the annual sales rate hit 2,824.

    The number of sales has exceeded the number of purchases every month since February 2015. The net change over that time represents a loss of 4,658 in Canadian owners.

    May 10 – The Cromford® Market Index values for the 17 largest cities and their single-family markets show quite a lot of movement in both directions:

    We have 7 cities improving for sellers and 10 cities deteriorating. As last week, 16 cities are seller’s markets (over 110) while one (Paradise Valley) is in the balanced zone (90 to 110).

    Among the improving cities we have the following showing significant change:

    1. Fountain Hills – up 15%
    2. Cave Creek – up 12%
    3. Maricopa – up 11%
    4. Avondale – up 8%

    Among the deteriorating cities, here are biggest movers:

    1. Tempe – down 13%
    2. Goodyear – down 11%
    3. Glendale – down 10%
    4. Chandler – down 9%
    5. Peoria – down 7%

    Although the market remains heavily skewed in favor of sellers, the overall trend is for this imbalance to fade very slightly.

    May 8 – Just as the supply situation is very different at the two ends of the market, the sales counts are behaving very differently too. Sales counts for the luxury market over $500,000 are dramatically higher than last year, unhampered by any supply shortage and fueled by buyer optimism. Sales counts under $250,000 are down compared to last year, largely due to a lack of sufficient supply.

    So far in 2018 we have seen 3,398 closed listings over $500,000 across Greater Phoenix (all dwelling types). At the same point in 2017 we had seen only 2,679.

    That is an increase of almost 27%. Thanks to the plentiful supply, price rises have been fairly modest in this sector so that the dollar volume is up 29%. Nevertheless that represents a huge increase in overall business volume, more than enough to make up for the increased number of active agents and brokers.

    Below $250,000 we see a year-to-date reduction is sales of 11% and a reduction in dollar volume of 7%.

    In the middle ground between $250,000 and $500,000, year-to-date sales are up 23% and dollar volume is also up 23%.

    The increased sales volume is even more extreme for homes over $1,000,000, where unit counts are up 32% and dollar volume up 33%.

    Despite the huge increase in luxury sales, supply remains fairly plentiful over $500,000 and very strong over $1,000,000. However the number of active listings no longer seems too large relative to the sales activity and the counts are starting to come down from the peaks of 2016. Sellers over $500,000 are starting to exercise a little more negotiating power, especially if they hold a modern home or one that has been recently upgraded.

    May 7 – Initial results from examining the recorded deeds in Maricopa County show that April was not as strong for sales as February or March, relative to last year. Total unit sales for single-family and condo/townhouse properties came to 10,712. However April 2018 had 21 working days, one more than April 2017. This means that the apparent 7.4% growth in sales over last year, really represents a 2.2% increase in sales per working day. This compares with 10.8% in February and 9.0% in March.

    The new home total of 1,295 was up 3.9% over April 2017, but after adjusting for the number of working days, this becomes a 1.0% decline. Given that both February and March showed more than 14% increases after adjusting for the number of working days, it appears that demand has weakened a bit, probably caused by the jump in interest rates.

    The number of listings under contract has also weakened a little over the past month. The Cromford® Demand Index is now less than 100 in the majority of cities, the exceptions being Buckeye, Cave Creek, Fountain Hills, Litchfield Park, Maricopa, Mesa, Paradise Valley, Peoria, Queen Creek and Scottsdale. The chronic lack of supply tends to mask any weakness in demand. However the following cities are showing unusually low Cromford® Demand Index levels:

    • Anthem 75.0
    • El Mirage 80.9
    • Sun City 81.6
    • Sun Lakes 78.6

    The market is still heavily favoring sellers because of the weak supply, but we need to keep a watchful eye out for possible weakness in demand. One place where demand is not at all weak is the luxury market, which is seeing a large increase in sales volumes over 2017, something we will examine in detail in a future observation.

    May 4 – Looking at the changes in the Cromford® Market Index among the 17 largest cities and their single-family markets, we see:

    We see 11 of the 17 cities showing deterioration for sellers with just 6 showing improvement.

    16 of the 17 are currently in a seller’s market with Paradise Valley the only exception, lying in the balanced zone between 90 and 110.

    Among the gainers, Fountain Hills, Maricopa, Buckeye and Cave Creek are the four leaders.

    Among the losers, Tempe, Glendale, Chandler and Goodyear fell the largest percentage over the past month.

    The movement overall is not huge, but the trend over the past month is for the extremely strong market to lose just a little of that strength.

    May 3 – Yesterday we looked at where supply was most plentiful relative to the number of homes that exist within in a ZIP code. Today we look at the opposite; the ZIP codes with the least number of homes for sale:

    For single-family homes:

    1. Gila Bend 85337 – 0.0%
    2. Palo Verde 85343 – 0.0%
    3. Phoenix 85035 – 0.2%
    4. Mesa 85210 – 0.2%
    5. Phoenix 85033 – 0.3%
    6. Mesa 85203 – 0.3%
    7. Mesa 85204 – 0.3%
    8. Phoenix 85053 – 0.3%
    9. Phoenix 85037 – 0.3%
    10. Phoenix 85019 – 0.3%
    11. Phoenix 85031 – 0.3%
    12. Phoenix 85027 – 0.3%
    13. Glendale 85302 – 0.3%
    14. Mesa 85202 – 0.3%
    15. Phoenix 85009 – 0.3%
    16. El Mirage 85335 – 0.3%
    17. Phoenix 85040 – 0.3%
    18. Glendale 85306 – 0.3%
    19. Chandler 85224 – 0.3%
    20. Phoenix 85017 – 0.4%

    For townhomes & condos:

    1. Peoria 85381 – 0.0%
    2. Mesa 85213 – 0.0%
    3. Phoenix 85009 – 0.0%
    4. Phoenix 85043 – 0.0%
    5. Phoenix 85041 – 0.0%
    6. Glendale 85307 – 0.0%
    7. Tolleson 85353 – 0.0%
    8. Laveen 85339 – 0.0%
    9. Buckeye 85326 – 0.0%
    10. Phoenix 85083 – 0.0%
    11. Phoenix 85023 – 0.1%
    12. Glendale 85306 – 0.2%
    13. Mesa 85204 – 0.2%
    14. Peoria 85383 – 0.2%
    15. Peoria 85345 0.2%
    16. Mesa 85202 – 0.2%
    17. Gilbert 85234 – 0.3%
    18. Glendale 85302 – 0.3%
    19. Mesa 85203 – 0.3%
    20. Phoenix 85022 – 0.3%

    These tend to be affordable locations reasonably close to the center of the valley. Gila Bend has no active listings. Palo Verde has no active listings, but then there are only 33 homes in the entire ZIP code.

    Phoenix 85035 (part of Maryvale) has the lowest percentage of active listings of all types – just 1 in 452 homes are for sale.

    Way out in the far West Valley, Aguila 85320 has 1 in 12 homes for sale. Still some negotiation power for buyers who are prepared to live that close to California.

    Among the more well known areas, Scottsdale 85262 has the most plentiful supply – 1 in 16 homes there are for sale.

    May 2 – In Maricopa County 1.0% of single-family homes and 1.1% of townhomes / condos are currently listed for sale on ARMLS without an existing contract. We normally expect to see an average of around 1.6%.

    Some areas have far more of their single-family homes for sale, for example:

    1. Aguila 85320 – 8.3%
    2. Fort McDowell 85264 – 8.0%
    3. Scottsdale 85262 – 6.6%
    4. Paradise Valley 85253 – 5.1%
    5. Rio Verde 85263 – 4.8%
    6. Carefree 85377 – 4.4%
    7. Scottsdale 85255 – 3.5%
    8. Morristown 85342 – 3.2%
    9. New River 85087 – 2.9%
    10. Arlington 85322 – 2.8%
    11. Phoenix 85108 – 2.7%
    12. Scottsdale 85259 – 2.6%
    13. Fountain Hills 85268 – 2.5%
    14. Phoenix 85016 – 2.3%
    15. Cave Creek 85331 – 2.2%
    16. Phoenix 85085 – 2.2%
    17. Wickenburg 85090 – 2.2%
    18. Buckeye 85396 – 2.1%
    19. Peoria 85383 – 2.1%
    20. Anthem 85086 – 1.8%

    If you are a buyer who is tired of having so few homes to choose from, then these ZIP codes would give you some relief. They do include many very expensive locations however. None are perfect for the first-time home buyer on a limited budget.

    If you are looking for a condo or townhouse then these are the ZIP codes with the highest percentage of homes listed for sale without a contract:

    1. Mesa 85212 – 7.4%
    2. Phoenix 85045 – 5.6%
    3. Phoenix 85004 – 5.3%
    4. Phoenix 85003 – 5.9%
    5. Rio Verde 85263 – 4.9%
    6. Scottsdale 85262 – 4.6%
    7. Phoenix 85054 – 3.4%
    8. Glendale 85305 – 3.3%
    9. Carefree 85377 – 3.3%
    10. Phoenix 85012 – 3.1%
    11. Wickenburg 85390 – 3.1%
    12. Goodyear 85395 – 2.9%
    13. Phoenix 85006 – 2.8%
    14. Scottsdale 85266 – 2.8%
    15. Sun Lakes 85248 – 2.6%
    16. Phoenix 85050 – 2.5%
    17. Paradise Valley 85253 – 2.4%
    18. Phoenix 85016 – 2.3%
    19. Scottsdale 85255 – 2.3%
    20. Buckeye 85396 – 2.1%

    May 1 – The contract ratio compares the number of listings under contract with the number of listings active with no contract. It tells us how hot the market is for any chosen sector. It tends to be lower for higher priced segments where there is always a good supply of active listings. Rather than compare with a standard value, it makes sense to compare segment with its long term average and maximum values. This way we can see how hot the segment is compared with its history.

    In the table below we are studying single-family homes in Greater Phoenix by price range:

    Price Range Contract Ratio May 1, 2018 Long Term Average Max Last Time at This Level Comments
    Under $100K 65.1 146.7 800.3 Feb 2018
    $100K – $125K 153.8 136.9 518.3 Jun 2017
    $125K – $150K 170.0 117.1 325.1 Apr 2018
    $150K – $175K 275.5 101.7 275.5 never record high
    $175K – $200K 234.2 83.1 234.2 never record high
    $200K – $225K 167.5 66.4 189.4 June 2012
    $225K – $250K 131.5 58.6 146.4 June 2012
    $250K – $275K 117.8 56.1 124.5 April 2018 record high last month
    $275K – $300K 105.1 49.3 113.3 June 2012
    $300K – $350K 93.5 43.6 95.1 June 2012
    $350K – $400K 74.3 37.9 90.2 May 2013
    $400K – $500K 69.1 32.3 75.7 June 2012
    $500K – $600K 53.4 26.3 60.5 May 2012
    $600K – $800K 42.7 22.2 51.9 June 2013
    $800K – $1M 28.9 16.9 33.6 May 2013
    $1M – $1.5M 27.9 14.4 30.0 June 2012
    $1.5M – $2M 14.0 11.7 21.9 April 2018 record high was June 2013
    $2M – $3M 15.4 8.1 15.4 never record high
    Over $3M 9.9 5.1 10.0 June 2015

     

    • Under $150K, the fire is going out for lack of fuel. There are simply too few listings for it to function as a normal market.
    • Between $150K and $200K we have just set new records for the contract ratio (which has only been measured since October 2006). This market is extremely hot, but is in danger of running out of fuel before too long.
    • Between $200K and $350K the market is very hot, but not quite as frenzied as the summer of 2012. However the range $250K to $275K did set a new record last month.
    • Between $350K and $1.5M the market is much hotter than average but not yet close to breaking record levels set in 2012 or 2013.
    • The range between $1.5M and $2M is the coolest but is still well above average. Not in sight of its record set in 2013
    • The range between $2M and $3M has not been this hot since we started measuring contract ratios in 2006. It is unusual that its contract ratio exceeds that for $1.5M to $2M.
    • The range over $3M is very hot and very close to its all time record.

    The supply over $1M remains adequate, but the number of homes going under contract is very strong.

    Contract ratio is a seasonal measurement so we expect it to peak in May or June for each year.

     

     

    © 2018 Cromford Associates LLC

    The data used to create the Cromford® Report is obtained from public records and obtained under license from the Arizona Regional Multiple Listing Service, Inc (ARMLS). Cromford Associates LLC and ARMLS expressly disclaim and make no representations or warranties of any kind, whether express, implied or statutory, as to the accuracy of the data used or the merchantability or fitness for any particular purpose.

    Testimonials

    No small part of this deal working out was due to the intense negotiations and juggling of our real estate agent, Denise Pruitt with Arizona Best Real Estate. She acted in our best interest at every turn, taking the brunt of the unpleasantness and making it work out. WE WOULD NOT BE IN THIS HOUSE WITHOUT HER. I think she is owed a bedroom, at least. Maybe a portion of the pool. – Eric & Kathryn (clients of Denise Pruitt)

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