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Phoenix Real Estate Report

phoenix real estate market update
1. How fast are homes selling? Average number of days on market is 35 (down 19 days from last year)
2. How many homes are for sale? We currently have 4,577 properties for sale (down 69.3% from last year)
3. What is the average sales price? Homes around the valley are selling for $470,289 (up 24.3% from last year)

March’s supply was down 2.5% from March 2020 (with 11,066 homes listed for sale last month) and March’s demand was up 17.4% from March 2020 (with 10,404 homes sold last month). Average home values increased over 24% in the last year and we presently have only 0.85 month of inventory, which is down from 1.68 months at this time last year. Under 3 months supply means a seller’s market, between 3 and 5 months means a balanced market, and over 5 months means a buyer’s market. The fact we are staying below 1 month of inventory is record-breaking!

What is going on? We need to look no further than hysterically low inventories, where active listings are 69.3% lower compared to 2020. The term absorption rate is a metric used to evaluate the rate at which available homes are sold during a given time. It is calculated by dividing the number of homes sold by the total number of available homes. By historical standards, an absorption rate greater than 20% is a seller’s market, while an absorption rate below 15% is a buyer’s market. We currently have an absorption rate of 272.5%. When we look at the gross dollar sales volume for the first quarter, the numbers are staggering. In Q1 2021 we reported a gross dollar sales volume of $11.2 billion. This gross dollar sales volume surpassed the record-setting pace of last year by 36% and beat 2005 by 77%.

Is this 2005 all over again? The reason we reference 2005 is because it was a year characterized by extremely low inventories, high sales volume and rapid price appreciation. 2005 still reports the highest yearly sales volume in history and ended with a 39% gain in the median sales price, hence the reasons many analysts today point to 2005 in their analysis. However, while low inventory levels and rapid appreciation are similar, the market today has many differences. In 2005 we were adding many more homes to our housing supply through new construction. According to county assessor records 91,871 homes and condos were built between 2004 and 2005. Over the last two years, the assessor reported 31,829 new homes built. There were nearly 3x as many new homes added to the housing inventory in 2005 compared to today. In 2005 there were very loose loan underwriting standards. NINJA was a slang term for a loan extended to a borrower with little or no attempt by the lender to verify the applicant’s ability to repay. It stood for no income, no job, no assets. Today the underwriting process includes verifying the applicant’s identity, checking stability and amount of income, verifying employment, reviewing tax returns, examining financial statements, checking credit score and perusing credit reports to make sure they can afford the loan, as well as adhering to strict underwriting guidelines. Interest rates today are 3.13% according to Freddie Mac, in March of 2005 rates were 5.93%.

What can we expect? Real estate markets are cyclical, and this cycle will end too, but I do not see our current market following the disastrous path of 2005. 2021 is a byproduct of market dynamics, while 2005 was a result of speculation without restraint. The most frequently asked question is, “When will the market shift?” My only response is “no time soon”. In the short term, I just do not see where the additional supply needed to balance our market will come from. There is a common belief that once the COVID-19 Mortgage Forbearance is lifted the housing market will see a flood of homes become available. With Mortgage Forbearance just extended (again), millions of homeowners with federally guaranteed mortgages have the option to extend their forbearance an additional six months, and the federal foreclosure moratorium deadline has been pushed back to June 30, 2021. The first signs of a market shift will be subtle. Listing agents will begin seeing fewer offers. They will still sell the home quickly, but they will see the number of offers decline. The real indication of a market shift will show in the supply vs demand charts, but the current extremes can not and will not change dramatically overnight. So I will keep monitoring the data searching for those subtle changes. In the meantime, if you were shocked by our quarterly numbers, wait until you see our semi-animal numbers!

Data from ARMLS® COPYRIGHT 2021.

9801 N 37TH DR, Phoenix

* MULTIPLE OFFERS * Original owner has taken great care & pride of ownership shines! Over 15,000 sq ft private lot on secluded street with no HOA! Solid oak French door greets you into expansive foyer with vaulted ceiling living room & formal dining room. Also features a family room with cozy fireplace. And here come the updates… new wood-look tile, refreshed bathrooms, all new carpet & blinds just installed, interior just painted, new HVAC replaced only 2 months ago, roof replaced in 2012 with upgraded shingles, water heater only 2 years old & dual pane windows throughout. Bring all your toys… expanded parking slab can accommodate at least 6 vehicles behind custom wrought iron gates, plus there is an attached 2-car garage at rear of home.

Phoenix home for sale, marketed by Phoenix Realtor Andrew Robb.

Listing Price: $379,000
MLS #: 6219906
Address: 9801 N 37TH DR
City: Phoenix
State: AZ
ZIP: 85051
Home Size: 1,887
Lot Size: 15,442
Bedrooms: 3
Bathrooms: 2
Garages: 2
Pool: N

First Time Home Buyer

Phoenix First Time Home BuyerLooking to buy your first home in Phoenix? There are three loan types and one down payment assistance program that may be ideal for you, depending on your situation:

1. Conventional loan is a mortgage available to buyers with as little as 3% (of property sales price) down payment. This will require mortgage insurance (in the form of a monthly premium built-in to the mortgage payment) unless the down payment is 20% or more of the sales price. Generally, mortgage insurance can later be removed by the lender once the equity in the home exceeds 22%. Borrowers will need to have a FICO credit score of at least 640 and typically the higher the credit score, the lower the insurance premium will be.

2. FHA loan is a mortgage available to buyers with as little as 3.5% (of property sales price) down payment. Mortgage insurance will also be required (in the form of a monthly premium built-in to the mortgage payment) but allows for borrowers to have a FICO as low as 580. For borrowers with a 500-579 FICO credit score, they must put down 10% of the sales price. Mortgage insurance remains for the life of the loan, so the only way to avoid paying it is to refinance out of an FHA loan into a conventional loan when possible for the borrower.

3. VA loan is a mortgage available to military (active or retired) buyers with as little as 0% (of property sales price) down payment. There is no mortgage insurance required however there is a VA funding fee of about 2.5% that is added to the loan balance at time of origination. Typically a borrower will need a FICO credit score of at least 640 to qualify, along with their military certificate of eligibility from the VA.

Arizona also offers a down payment assistance program to help first time home buyers in Phoenix. The main benefits of the Home Plus loan program are down payment assistance, closing cost assistance and reduced mortgage insurance premiums. To be eligible, buyer must occupy home as their primary residence, the home price cannot exceed the program limit, buyer must meet income and credit score requirements, and finally the buyer must also complete an educational course about borrowing and home ownership. Borrowers who qualify for Home Plus can get up to 5% of the purchase price in the form of down payment assistance. This gift is by way of a no-interest (silent) second mortgage that is 100% forgiven as long you do not sell or refinance your home for 3 years.

Questions about these loan types or down payment assistance program? I can put you in touch with a variety of reputable local Phoenix lenders to handle all your inquiries.

Oldest Home in Phoenix

Oldest Home in Phoenix
Happy 135th Birthday! If the Farmer-Goodwin property is not the oldest remaining home in Phoenix, it is certainly tied for first and features the most interesting history.

Originally built in 1883 by a saloon keeper on land he bought in 1880, it was then purchased by Hiram Farmer in 1886 for $3000 and situated on 160 acres. It served as Farmer’s home during his work as (what is now) Arizona State University’s first professor and principal.

So where does Goodwin fit in? When the railroad arrived in 1887, Farmer developed his land into one of Tempe’s early subdivisions but when he left the area in 1890, the property passed through several owners until it was acquired in 1897 by James Wilson, whose daughter Libbie married James Goodwin in 1902 and the house was deeded to her.

Goodwin was a successful Tempe rancher and businessman. He was a member of Theodore Roosevelt’s Rough Riders during the Spanish-American War and served in the Arizona State Legislature from 1915 to 1918. The house continued to be owned by the Goodwin family until the death of James and Libbie’s son, Woodrow Wilson Goodwin, in 1992.

The home represents Victorian-era architecture but lacks the “gingerbread” detailing often found in Victorian-era buildings. It is a two level adobe structure, rectangular and symmetrical in floor plan, with exterior adobe walls finished in plaster and scored with lines to simulate the look of cut stone.

Inside the house has a central hall with approximately equal-sized rooms symmetrically on either side of it. The room layout is identical on the upper level and access is by a stairway in the central hall, located in the very middle of the home.

Today the mansion sits on a 25,000 sqft lot and features just over 4,000 sqft living space along with a pool and detached 2-car garage with guest casita. It resides (aptly) at 820 S Farmer Ave and is in the National Register of Historic Buildings.

Farmer-Goodwin floor plan

11011 W COLLEGE DR, Phoenix

* SOLD IN 4 DAYS OVER LIST PRICE WITH MULTIPLE OFFERS * This newer home is move-in ready, thanks to all brand new carpet just installed and fresh neutral interior paint throughout! Enjoy easy maintenance inside with laminate wood floors on entire downstairs and carefree backyard with artificial grass, covered patio and paver stones. No house right on top of you in the back, so you have room to breathe! This original owner home has upgraded ceiling fans and dark faux wood blinds in each room, sharp black appliances in kitchen, plus Whirlpool washer and dryer are included in the upstairs laundry room. Close to loop 101, Westgate shopping/dining/entertainment, Cardinals Stadium, Jobing Arena, Tanger Outlets and baseball spring training.

Spotless original owner home for sale in Phoenix with new carpet and paint, plus easy maintenance yard, marketed by Phoenix Realtor Andrew Robb.

Listing Price: $159,000
MLS #: 5223439
Address: 11011 W COLLEGE DR
City: Phoenix
State: AZ
ZIP: 85037
Home Size: 1,902
Lot Size: 4,200
Bedrooms: 3
Bathrooms: 2.5
Garages: 2
Pool: N
Andrew Robb - RE/MAX Fine Properties, 21020 N Pima Rd, Scottsdale AZ 85255