The May Boom – Phoenix Metro Area Real Estate Highs

By Uncategorized June 10, 2019

May 2019 was huge. All-time records were set for sales units and dollar volumes through the Arizona Association of Realtors MLS (ARMLS) and surpassed not only 2018 but the bubble year of 2005!

A calendar month record of 10,466 home sales was set this May. The previous record high was 10,345 which was set in June 2011 at the height of the REO feeding frenzy.

Also, the dollar volume for May was $3.647 billion, where the previous high was $3.354 billion which was set in May of last year. The previous high was $3.245 billion set in June 2005 at the height of the real estate bubble.

Not to be outdone, the monthly median sales price of $278,000 is a new record high. The annual median sales price is also at a new record high at $265,900

What didn’t set a record was the average sales price per square foot (PSF), and is nowhere near setting a new record, ($172 PSF) because the homes being sold today are much larger than those being sold at the last peak. The monthly average PSF record is $190.05 set in May 2006.

The wild card however is that mortgage rates have again dropped into the 3% range. This could spur newbies to buy…but this could further reduce supply which could continue to drive up values.

The supply of homes for sale is still higher than last year, but it’s dropping faster than it did at this point a year ago. New listings are arriving at roughly the same rate as 2018 so the reason supply is falling is that homes are going under contract faster than last year.

It’s unlikely that anyone would have predicted a May like this back in January. Why now? Several possibilities come to mind. The added supply of homes for sale increased which could have played a part to spur on buyers. I also think the continued rise of valley rents is swaying more folks into buying.

What can we expect from this point on? Well, May is usually the strongest month in each year, so we normally expect monthly volumes to decline for the rest of 2019. We are also reaching the point where prices go a little soft for 3 or 4 months.

The wild card however is that mortgage rates have again dropped into the 3% range. This could spur newbies to buy, plus recent buyers who bought in the mid to high 4% range this past year to look at refinancing. We may not set new monthly sales records, but this could further reduce supply which could continue to drive up values.

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.