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.