By Frank May
It’s December 2020 as I write this article and we are in an uncharted area in the real estate market. In the greater Phoenix area, as of December 9, the active listing count in the Arizona Regional MLS is 6,544, which is down 19% from this time in November. This in comparison to December 2008 where there were 56,000 active listings.
Michael Orr of the Cromford Report states: “The supply situation has gone from bad to worse with many areas hitting record lows for the number of homes available to buy. This is not because of a low number of new listings. The flow of new listings was respectable in November and exceeded the total for November 2019 and 2018. However, it increased by far less than the annual increase in demand and many of these new listings went under contract within days of listing. We exited November with 15% fewer homes for sale than we entered it. We have run out of adjectives to describe the weakness of the supply situation. It looks almost certain that supply will collapse further during December, so if we had a good adjective, we would need a better one for January 3. Demand is extraordinarily strong for this late in the season, so we currently have a market that is more unbalanced (in favor of sellers) than we have ever seen before, even at the height of the 2005 bubble. But next month will be even more extreme.”
What does this mean for you?
As a seller, you can bet you will get top dollar for your listing and can expect multiple offers if priced appropriately. This is evident in the 1,900+ homes that sold in 85383 in 2020; even during a pandemic we still saw growth year over year in homes sold. Not only did we sell more homes, 1,864 in 2019, but we also sold them for more money and in fewer days on the market.
Here is a chart of comparable sales year over year:
Although that chart doesn’t seem overly impressive, having an 8.9% increase in home sale prices on average in just one year of sales is pretty impressive. If you were to put the money into the bank you would not see almost a 9% increase in one year. Not just a price increase but a time decrease happened year over year as well. This year saw homes selling in 20 days less time than the previous year. This is almost an entire month that people were not having to show their home to prospective clients.
This can feel like a whole lot of stats. But, the break down is that 2020 had more sales for more money in fewer days than 2019. If you ask anyone in real estate, they will tell you that 2020 was a crazy year and surprisingly they were busier than they had been in their entire career or very close to their busiest.
Buyers still have a chance at their dream home.
This doesn’t mean buyers don’t have a shot at getting the home of their dreams. We have been able to get many clients into homes in 85383. We negotiate properly, and educate you, the buyer, on what you need to be competitive in this market. But don’t wait for a bubble to happen just yet. With interest rates staying at record low numbers and homeowners sitting with a ton of equity in their home, you won’t see another bubble like 2007 anytime soon. My best advice is to act now if you are ready to buy. We are happy to help you find that perfect home. Give us a call at 623-203-1800 and we can walk you through what you need to buy or sell in 2021.
Frank May grew up in the Valley, graduating from Northwest Christian School and NAU. He is a real estate agent with Keller Williams Realty and has been helping both buyers and sellers for 18 years. Frank May is also a Dave Ramsey Endorsed Local Provider.