As Realtor professionals, we view the current Phoenix Metro residential real estate market landscape with a mix of excitement, and wonder. Excitement because we’re seeing the initial stages of a potential and dramatic market shift. I mean, this is happening now, in real-time.
The wonder part has to do with the question, “We wonder what’s next?” I think the best way to demonstrate the current market is by providing various market facts (or professional opinions) that we’re observing, such as:
Fact: The latest (11-26) S&P Case-Shiller report: Phoenix is leading the nation in appreciation year over year at 6%, which is close to twice the national average of 3.2% and almost 25% higher than the next leading city. The index rose .46% since last month! Benefit: Homeowners. Detriment: Renters.
Fact: Mortgage Loan Limits: Recent news last week reported by the FHFA that Conforming real estate Loan limits in Maricopa County will increase 5.4% from $484,350 to $510,400. This move enables borrowers to obtain higher mortgage amounts without the higher costs associated with a “jumbo” mortgage. Benefit: Moderate to Higher Priced Buyers.
Opinion: Low Mortgage Rates: Mortgage rates for the next year are expected to remain at current historically low levels, according to the Mortgage Bankers Association. They predict mortgage rates will remain low in 2020, rising to an average of about 4% by the end of next year, with the impact confined mainly to boosting home purchases rather than spurring refinancing. Benefit: Buyers.
Fact: 12,611 active listings compared to 17,081 last December 2nd 2018. Benefit: Homeowners/Sellers. Detriment: Buyers. Renters.
Fact: New Home Construction Strengthens: At the end of October there were 20,791 single-family permits issued across Maricopa and Pinal counties, up 6% from 19,600 in October 2018. Benefit: Buyers.
The top 10 cities for single-family permits in 2019 so far are:
- Phoenix – 3,393 (3,087) +
- Buckeye – 2,068 (1,856) +
- Unincorporated Pinal County – 2,009 (2,285) –
- Mesa – 1,728 (1,649) +
- Maricopa – 1,608 (1,098) +
- Surprise -1,414 (1,170) +
- Goodyear – 1,368 (1,118) +
- Queen Creek – 1,220 (1,112) +
- Peoria – 1,187 (1,099) +
- Gilbert – 998 (1,262) –
Opinion: As we’ve reported in these last few issues, we believe the Phoenix metro communities are on the verge of a major price escalation, at least all signs seem to be pointing in that direction, and now being confirmed by local and national statistics.
How would I know? Well, frankly I don’t know for sure, but I’ve seen some market similarities in four decades in this business. What would surprise me, however, would be if this market didn’t escalate.