The latest real estate information in the Phoenix/Scottsdale metro area for February 2020 via our local Cromford Report:
The current situation is even more remarkable than last month.
Here are the basics – the ARMLS numbers for February 1, 2020 compared with February 1, 2019 for all areas & types:
- Active Listings (excluding UCB & CCBS): 11,974 versus 19,040 last year – down 35.1% – and down 1.4% from 12,141 last month
- Active Listings (including UCB & CCBS): 16,015 versus 22,655 last year – down 29.2% – but up 6.8% compared with 15,018 last month
- Pending Listings: 5,969 versus 5,012 last year – up 19.1% – and up 28.0% from 4,662 last month
- Under Contract Listings (including Pending, CCBS & UCB): 10,030 versus 8,627 last year – up 16.3% – and up 33.0% from 7,539 last month
- Monthly Sales: 6,403 versus 5,467 last year – up 17.1% – but down 17.8% from 7,789 last month
- Monthly Average Sales Price per Sq. Ft.: $182.20 versus $167.79 last year – up 8.6% – and up 1.3% from $179.85 last month
- Monthly Median Sales Price: $289,900 versus $262,000 last year – up 10.6% – and up 0.1% from $289,500 last month
Last month I wrote that buyers must hope for a big surge in new listings. Not only did they not get anything close to a big surge, or even a tiny up-tick, they unexpectedly got far fewer new listings than normal. The lack of supply was described as shocking at the start of 2020, so I am starting to run out of adjectives to adequately describe the current state of supply. It is almost (but not quite) unheard of to see supply drop between January 1 and February 1, but active listings without a contract are down 1.4% for the month. They are down a colossal 35% compared to a year ago.
Meanwhile demand has been picking up so that monthly sales are up 17% compared with last year while listings under contract are up 16%. Given that there are so few homes to buy, this is impressive.
Economics 101 teaches us that lower supply and higher demand is a recipe for higher prices. So far the reaction of pricing has been muted. However, you should not expect it to stay that way. The spring selling season has just started and by the time we get to June a significant upward adjustment in pricing is likely.
Mortgages are becoming easier to qualify for in many different ways, so demand is likely to increase. Yet there is no sign of more supply coming along to satisfy it. In this situation the market is likely to become both frenzied and frustrating. We certainly live in interesting times.
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ARMLS Listing Data last updated 5/30/2020 4:04 AM MST.