By Holly Henbest, Realtor
Lack of supply has been the key cause for pricing inflation over the last year, but our supply is slowly starting to increase. Construction of new homes has been falling short of our increase in population since 2010. Although building is increasing, we are trying to catch up from 11 years of shortfall. In 2020 alone, our population grew by 106,008 residents and 31,792 homes were built. That would be pretty good, except that doesn’t make up enough for the short fall over the previous 10 years.
Here are the statistics from The Cromford Report for Maricopa County in June 2021 for condo/townhouse and single-family home properties:
• Total units closed were 12,220, which is up 19% from June 2020.
• Newly built units closed were 1,661, up 2% while re-sale units were 10,559, up 23%.
• The monthly median sales price was $400,000, which is up 24.2% from June 2020.
• The new build median was $407,047, which is up only 9.3% from June 2020.
• The re-sale median was $400,000, which is up 28.2% from June 2020.
There are no crystal balls to predict the future, but we can project (based on current data) that pricing will continue to increase, but at a much slower rate than we’ve seen in the last six months. We also project inventory to increase, not only because of increased building, but because sellers who weren’t comfortable having people in their home or moving during the height of the pandemic are now tired of waiting and ready to make a move. There is some pent up inventory that is starting to come through due to people being vaccinated and ready to move on with their life plans.
In the last issue I wrote that I suspected the market to cool in July and that is exactly what we are seeing. The combination of buyer fatigue, increased travel, and our temperatures have cooled the buyer market. We typically see a seasonal drop of sales during our warmer months, so this is not abnormal, but rather totally normal.
The two questions I’m most frequently asked:
- Is the frenzy over? A frenzy is now more dependent on the location and supply in an individual neighborhood and how the home is priced. If there are five similar homes for sale, then there isn’t likely to be a frenzy. If there is one home listed for sale, there could be a frenzy.
- Are prices going down? No, they’re not. The projections all indicate that pricing will continue to increase, but at a much slower rate than we’ve seen for the last six months.
Do you have questions about buying or selling? Give us a call at 480-266-8785 or e-mail me at email@example.com.
Holly has been a Desert Ridge resident since 2000 and has been a realtor since 2006. She is the leader of The Henbest Team with Realty One Group. Holly is ranked in the top ½ of 1 percent of Realtors in Arizona and is a Certified Luxury Marketing Expert. She was also ranked #24 in 2019 by the Phoenix Business Journal and recognized by So Scottsdale! magazine as a Real Estate Superstar for 2019.