If you are still looking for a sign that Phoenix real estate is making forward progress, following an initial spike in pending sales after Super Bowl XLIX, check out the latest numbers:
While the news outlets, like the AZ Republic and Phoenix Business Journal, continue to report that the market is gaining steam, this chart shows precisely how. The Cromford Report’s Contract Ratio, indicates how “hot” a market is. This stat is obtained by dividing the number of pending listings (Pending and UCB- accepting back-up offers)/the number of active listings. Multiply that number by 100.
Normal is considered a range of 30-60. Over 60 is considered a “seller’s market” and below 20, a “buyer’s market”. Over 100 is considered a “buying frenzy”. The ultra luxury market typically rests within a range of 15-25. The higher this number moves, the better the market.
Every list price range below $499,000 is above 30 within the normal range of 30-60. However, things are improving substantially all the way up to $800K! If you are a seller planning to sell a home under $500K, the market is in your favor right now. If you have a home to sell below $250K, the market is really hot!
If you’re selling a home above $800K, it may take you a little longer than it has been. This area of the market has slowed down substantially since December when luxury closings spiked. Note that homes under $50K are also weakening- this is likely because this inventory is drying up and usually tends to represent the worst options available. We’re looking at a huge supply of homes coming on the market.
Buyers aren’t going to have all the options they had a few months back if they are buying in the majority of the areas in Phoenix & Scottsdale. So, if you’re buying a home this spring, buck up, make sure your financing is solid and really start paying close attention to the areas that interest you. There are already parts of the Valley that are just “seller’s markets”. Be prepared to compete against multiple offers in these areas.
Sellers, if you’ve been waiting to sell, now may just be that time to move on. Figure out what the competition looks like and be prepared to find a way to stand out from the crowd. Smart improvements go a long way. You’ll need specifics for the area right around you. Call me for those numbers and I’ll be happy to share them with you!