4/19/2021 Phoenix Market Update

Mortgage rates dipped again?! Check out the latest market trends in the Phoenix Housing Market. 

Hello, everyone, and welcome to a new edition of Merrill's Monday market madness coming at you with an update about what is going on in the Phoenix residential housing market, hopefully keeping you updated, informed, and educated about, you know what's going on in the market. If you own a home, you'll want this information to kind of know what the markets are doing. If you're thinking about selling or thinking about buying all this information should be very helpful for you. It is a little geeky, a little very numbers-based, I'm kind of a stat rat, and I love looking at this stuff. But I'll try to kind of explain what it means to you if you're not so into the numbers. And if you are really, really into the numbers, let me know when we can do a deeper dive on what specifically is going on in your neighborhood, your house, your zip code, I really do enjoy looking some of this stuff up. So please feel free to take advantage of that service. And let me know what stats you would be interested in seeing. 

As always, I start every episode off by a look at the monthly supply of inventory numbers. So right now in our whole market, we have 4712 active listings, which is Well, I mean, it's about a normal number for Monday, last Monday, we were at 4713, Monday for that 4527, 4510. Monday before that 4492. So we're up about 200 active listings over the past five weeks. So there has been some talk that like, Oh my gosh, you know that maybe the demand is slowing? I don't I don't know if I agree with that. I think that it's just the time of year, we get a lot more listings coming on the market. Because if you're out there working with buyers, out making offers on homes, everything still seems to have 10 offers. So I think it's just a lot more homes are coming on the market quickly. And it's just taking a little bit longer for those homes to go under contract, you know, and update the status. So right now, the total number of listings under contract, we had 13,121. And then the total number of listings that we have had close in the past 30 days, is 9037, giving us a month supply of inventory of 0.52, which again, is very, very much a seller's market, again, a balanced market would probably have a month's supply of inventory, you know, four or five months of supply, whereas 0.5 so as long as that holds true supply is much, much, much, much, much lower than demand is and we're going to continue to see rising, rising home prices. 

You know, a lot of people kind of asked me and I did a whole other video that I will get posted soon about why I don't think we're in a bubble. So you know, see that as soon as it comes out. And I'm not gonna go deep into that information right now. But the most common question I kind of get is well when does this slowdown? Because if you're a buyer, you know, a buyer has tried to buy a home in this market. It's frustrating. It's you know, it's intense, there's every home got multiple offers, it can be very difficult to get an offer accepted, you know, and it just feels unsustainable in some ways. So what's the tipping point like what will eventually cause the market to slow down. And I believe one of the key factors in that is mortgage interest rates, mortgage interest rates, being at near all-time lows right now really helps fuel the market, it's fueling affordability, right. If you can finance a home at a 3% interest rate as opposed to a 5% interest rate, you can afford to buy more houses because of the monthly payment, most people don't really aren't super focused on what the purchase price is, they want to know what their monthly payment is. So if that monthly payment is affordable to you, then that's what matters. And you know, if interest rates go up dramatically, suddenly you won't be able to afford as much house. 

So right now, and I look at this site almost every single day, but Freddie Mac, and posts kind of this average interest rate information. And I believe last week, they had an average fixed-rate mortgage rate at 3.13. And today, we're at 3.04. So we actually did see a little bit of a drop in rates this week, which is exciting to kind of look at it on a graph. It's the first drop we've seen since let's see this week here around early January. So rates have been going up pretty steadily since early January. And then moving out of the blue we saw a bit of a dip this week. So if you've been holding out on an interest rate lock, or you've been holding out on a refinance, or something like that, trying to wait for rates to possibly get better. Now might be a great time to jump on that. They do say in their commentary up here that they are just you know they talk about inflation factors and things like that, but they are expecting interest rates to increase modestly through the rest of the year. They don't define what modestly means, but it doesn't seem like they're expecting rates to skyrocket. They might go up I don't know, half a percent or something like that. Over the next year, which can be a dramatic difference for, you know, a lot of buyers, I'm not trying to minimize half a percent, we'll see, we'll see what it ends up doing. But the good news for this week is that it went down. 

Lastly, and I've never actually shared this on the screen before, but, but I really love it. Our MLS publishes a monthly newsletter called the stat newsletter. It's obviously my favorite publication. And it explains some of the key metrics about what's going on in the market. And I'm not going to bore you with all of these numbers in here. But there were a couple of really interesting numbers that I wanted to share with you. So the first one is right here where it says total inventory. So total inventory is taking a look at all the actives, the pending, the under contract homes on the market. So right now we're at 9043.

The total inventory, as compared to the same time last year, we were at 8000 18,226. So just in the past year, the total number of homes available has been cut in half, which is, you know, a dramatic problem, obviously. And then the other metric that I find really fun and exciting is average sales prices. So average sales prices are up 25%. year over year, that's one of the biggest increases that we've seen in just a year over a year in a long time, median average, median sales prices are up 19%. And they are projecting a further increase of up to 486,000. For the average sales price, just in the month of April. So a huge projected jump in the average sales price coming in the month of April. And again, there's nothing saying this trend is gonna slow down; average sales prices will probably be well above 500,000 by the end of summer. Obviously, the number of distressed properties is way down. But then the other factor is the other metric in here that I just found really, really fascinating. It does talk in the newsletter about new builds starting, you know, how many new build homes are being sold? And it is? Yeah, here we go. So in 2005, there were 43,426 new build homes sold. 2004 was 48,000 2019 and 2020 15,016 1000. So it seems like a lot of homes are being built, it is nothing compared to what was happening. And with the continued problems of lumber shortage and building supply materials and windows and cabinets and all the problems that builders are having right now. The solution to our inventory problem is not going to be able to be fixed by builders anytime soon. The last thing that was quite fascinating, is just the total sales volume. So in 2021 so far, in March of 2021, our MLS saw $4.6 billion worth of real estate sold. Not only is that the biggest month ever, but there's also not even a previous month that hit 3 million. I mean, excuse me 3 billion other than January and February this year, first month ever, where the total sales volume exceeded $4 billion and it exceeded it by a pretty wide margin at 4.6 billion so 2021 setting out to be the greatest the most real estate ever sold in the Phoenix area in terms of dollar amount by far this year. And of the course last year 2020 was just barely beat out by 2000. Was it 2005 or 2006? I don't remember. Anyway, that is it. I hope you found this information helpful or a little bit educational. If you have any questions or anything like that, please hit me up and I'll talk to you soon.

What does this mean to you? If you're even a little bit interested in learning more about participating in the Phoenix housing market as a seller, buyer, or investor... you NEED to know this stuff! Or at least work with someone who is obsessed with the market stats. Reach out to me today so we can start working on making your real estate dreams a reality!