Prices Rise While Demand Eases

By Buying, Mike's Articles, Phoenix Metro Real Estate News, Renting, Selling December 10, 2018

There’s good news for buyers regarding inventory. Active listings increased in November, up 3.4% from the month earlier and up 0.8% from one year ago. The downside for our buyer pool is that median prices continued to rise, (seller good news) up 6.1% (now at $260,000) from last year while the monthly average sales price per square foot (PSF) rose 7.5% from a year ago. The psf number did get a mild haircut losing 1.1% from last month.

Here are the numbers:

  • Comparing December 1, 2018 with December 1, 2017 for all areas & types. (Bold is our emphasis)
  • Active Listings: 18,563 versus 18,422 last year – up 0.8% – and up 3.4% from 17,953 last month
  • Under Contract Listings: 7,735 vs 9,176 last year – down 15.7% – and down 4.8% from 8,128 last month
  • Monthly Sales: 6,642 versus 7,202 last year – down 7.8% – and down 9.7% from 7,355 last month
  • Monthly Average Sales Price per Sq. Ft.: $166.46 versus $154.91 last year – up 7.5% – and up 0.6% from $165.39 last month
  • Monthly Median Sales Price: $260,000 vs $245,000 last year – up 6.1% – down 1.1% from $263,000 last month

Michael Orr of the Cromford Report states:

“The supply of active listings without a contract rose 3.4% during the month of November, while total active listings increased by 2.0%. These increases are in contrast to this time last year when we saw decreases of 1.2% and 1.7% respectively. Just like last month, there has been a definite improvement in available supply, although the improvement varies a lot by price range.

The increases in supply are not due to a rise in new listings, because we saw 0.6% fewer new listings during November compared with 2017. The supply is higher because of a significant decline in demand. We can see the drop in demand most clearly from the pending listing count and under contract count, both down dramatically from last year. In October, sales were slightly lower than in 2017, but in November the difference is more striking. A decline of almost 8% has not been seen since August 2014 and represents the arrival of the steep drop in demand that we have been anticipating for a long time. We do not have to apply any adjustment to these sales counts because both November 2017 and November 2018 had 19 working days.

Although demand is down, it remains in excess of the chronically low supply and we are still in a seller’s market in almost all markets. However the advantage for sellers is less than it has been for the past two years which means we are seeing more cuts in asking prices and greater willingness to agree to buyer requests during contract negotiations.

The additional supply is stopping the median sales price from rising, but the average price per square foot still has upwards momentum.

The Cromford® Market Index is still falling, but only slowly now, unlike the steep decline in October and November. In the low 130’s it represents a mild seller’s market and it would have to drop below 110 to represent a roughly balanced market, as last seen in early 2015. While this is always possible, at the moment it does not look very likely in the short term.”

About the Author
Michael Bodeen, Associate Broker

     I was born and raised in San Rafael, California, from the mid 50’s to the early 70’s. I had super parents who worked hard to provide 5 kids with a good Catholic education – despite my best attempts to overthrow the knuckle-cracking regime of Sister Mary Anselma. My dad worked as a self-employed butcher until his retirement at 65 and enjoyed many wonderful years until mom passed away in 1992.

     Dad passed away in the fall of 2006 having lived a great and full life into his early 90’s! In California, I attended college in Chico and Sacramento as a “Sosh” major, but like many of my contemporaries, I did not have a clue what I wanted to do when I grew up. Because of my age, I missed the Vietnam War and into my early 20’s I had many typical youthful indiscretions.

     Thankfully, that was a brief period of my life, and with greater thanks, not too much damage was sustained in those early and rebellious years. And by the way, those thanks are due to the answered prayers of faithful relatives who prayed for years that a wayward Michael would turn his life over to the Lord, and in January of 1982 that’s what happened.

     I lived in Sacramento, California in the mid 70’s, and later moved to Truckee, California, which is near Lake

Tahoe and Reno, Nevada. Truckee’s often labeled the “coldest spot in the nation.” Why did I move there?

My father-in-law was a real estate broker in Donner Lake, California, and despite his cantankerous disposition, he seemed very successful in his real estate endeavors. I joined him in sales in July of 1976.

    The Truckee and Lake Tahoe area was a wonderful place to raise a family, but a difficult and cold environment to live in, but we did so for 18 years. In 1994, my wife, Karen, and I visited Scottsdale at a friend’s request, and within 8 months, our family of 5 had relocated to “the valley” – or is it a desert? Whatever it is, it’s warm. At any rate, 24 years have gone by since we made the break from the late great state of confusion, uh, California, and it’s turned out to be a great move.

     As for hobbies, I enjoy family, friends and travel. My kids Robert, Kendra, and Jonathan are now 40,

34, and 31 respectively. I recently became “gramps” for the 4th time as well. It’s a nice time of life. Karen remains as lovely on the inside and outside as the day we were married. We continue to wonderfully grow together as the years advance. As an ordained Christian Chaplain, I volunteer Preaching at Florence Prison with Along Side Ministry. The ministry helps make the formerly incarcerated able to function, even thrive, on “the outside.”

     Should you choose to have me represent you in the sale or purchase of your home, you’ll be receiving my 40+ years of real estate knowledge, counsel, and experience (including negotiation experience).

    Beyond the transaction, I’m always available to you, should you ever need my real estate advice.