April 2011 Phoenix Metro Market Update
The Phoenix Metro Area’s Real Estate Market continues to have some positive gains in April 2011. April had the 9th highest sales figure of the decade. Also, the Days On Market (DOM) are down and inventory is down–since January, there has been an 18.7% drop in inventory. As a result, home prices, albeit slowly, have continued to rise throughout Phoenix.
The continued decline in distressed property inventory and the number of foreclosures pending in the Phoenix Metro market have also lead to an increase in price of distressed properties. Home Buyers and Real Estate Investors looking for bargains in the REO market should note that the list price average is now $71.22 per sq. ft. up from its low point of $68.77 per sq ft in March.
The recent increase in average sales price has also been influenced by the Phoenix Luxury Home Market. The Price Per Square Foot for homes above $300,000 has been increasing since November 2010 and sales are on the rise.
More good news is that Phoenix Metro Area unemployment fell again to approximately 8%. Phoenix is projected to add 42,300 jobs over the next two years with gains mostly in tourism, health care and education. CX.com, USAA, DataSphere Technologies Inc, Easy Energy Systems and Southwest Ambulance all expect to hire new workers for full-time positions within the year.
While the Phoenix Metro Real Estate market continues to be attractive to Home Buyers and Investors, our depressed pricing remains discouraging to upside-down Home Sellers. However, if demand stays high, prices for existing homes will have to continue to increase.
Phoenix market Analysis for March
March 2011 showed a HUGE increase in closed homes in Metro Phoenix–there were 9,901 closings, according to the ARMLS. Amazingly, this is the 5th HIGHEST monthly total EVER recorded in Phoenix. The only months that have had more sales were: March, June and August 2005 and June 2004.
The supply of properties is falling in all regions of Phoenix and in every price range–especially under $150,000. In the Phoenix East Valley, there is a lot of competition for properly priced properties under $300,000. In my recent experience, there have been multiple offers within the first few hours of being listed on the MLS and often these properties sell for over list price. This is a result of real estate investors coming to Phoenix, especially from China and Canada, who are buying properties and ultimately driving up demand and lowering the amount of housing inventory. Understandably, this is disheartening and frustrating to people wanting to buy a “home.” Most often, those looking for a primary residence in Phoenix under $300,000 expect to buy a house substantially under list price. Whereas this was true a year ago, it is not longer the case today.
The good news is, if we continue on this trend, Phoenix home prices should begin to increase.
