Happy Earth Day!!
My Q1 2015 Recap for Phoenix real estate, broke down how our market shifted in a big way from being balanced (not very exciting) to increased demand and sales activity. Year to date, closed dollar volume is the 3rd best year we've seen since The Cromford Report started collecting this data. The only years that did better? The 2 that sandwiched the peak of our market before the crash (2005 & 2006). Higher prices are usually a lagging indicator of market improvement, but that also may seems to be following the trend. As of 4/21/14, the Cromford Report noted:
"We are now seeing a surge in the closed sales price per square foot - $135.20 for the period March 21 to April 20 across all areas & types. This is a full 3.1% higher than a month ago. Normal sales are averaging $137.63 per sq. ft. and this is up 2.4%. The latest figures are helped by a $6.8 million dollar equestrian estate home in Scottsdale which closed yesterday at just under $1,000 per sq. ft.
We are likely to stay in the $135 to $140 range for the next couple of months, but the real test is whether we can stay above $135 during the third quarter, which is typically the weakest of the year for average price per sq. ft."
That's pretty good. I've stated before that appreciation is historically about 1-4% per year. We saw that in the last month alone... I have new listings coming to market in Scottsdale shortly in very high-demand areas. Because the Sellers are choosing to prepare their homes prior to listing, we're watching the market to set the list price right before each goes active in ARMLS. This equates to us revising the asking price UP almost every time we look because of new closed & pending sales indicating higher comps AND due to the lack of new inventory coming on the market.
Buyers- sitting the fence or worse yet waiting for the next "smokin' deal" to come along, please don't hold your breath... Get your pre-qual letters set, brush up on the activity in your target area and be ready to RUN, not walk to the next new listing that meets your criteria before Sellers start to realize what's happening.
Sellers- keep putting out a good product and don't get greedy yet. Buyers will bend over backwards for really fair & ethical sellers who stick to selling a well-maintained & well-priced home. If you've just read the good news and decide to raise the asking price on your already listed homes, DON'T. If they aren't willing to pay what you're asking today, unless there's nothing else out there, they probably don't want to buy if for more.
Buyers know when you're overpriced and will just wait for you to lower the price or offer you what they think the market will bear. If you even price it a little below market... behold! You're likely to get multiple offers and a final sales price above asking. Counter-intuitive, right? It's been this way for years.
Timing & knowledge now are the difference between higher, strategically-optimized Seller profits and calculated Buyers' savings from knowing 1. where prices are rising and 2. which loan programs benefit them most: i.e., special programs for Physicians, Attorneys & CPAs, 5% down loans, loans for people with tarnished credit & more!
If you're a Seller OR Buyer with questions about what's going on in YOUR area, call me for the cold, hard numbers that don't lie. Be well!