Here is the latest housing market update release from the Arizona Regional Multiple Listing Service. The numbers are reflective of many real estate markets throughout the country, showing rising prices and below normal inventory. While this does have an upward pressure on prices, the numbers are not moving as fast as you might think. When you look at average prices and average price per square foot, those price increases are only 1.2% and 0.46%. While slow and steady is not all bad, the prices have not moved far enough to motivate investors or some owner occupant sellers to pull the trigger yet. Read more information from the report below. You can read the entire report and see all the charts HERE.
The biggest change in homes financed occurred with FHA loans. In 2014 FHA loans accounted for 18.4% of home loan purchases, in April 2015 this percentage grew to 32%. The percentage of home purchases financed continues to trend higher which translates into an improving housing market. Mortgage rates were better in April 2015 at 3.87%, compared to 4.14% April 2014 (average 30-year fixed-rate mortgage).
Looking at the MLS, there were 8,319 residential sales in May 2015 compared to 7,445 sales in May 2014. Over the same period we saw active listings, removing UCB for this calculation, decline from 25,584 in May 2014 to 20,357 this year. An 11.7% increase in demand paired with a 20.4% decrease in supply is exerting upward pricing pressure. This upward pricing pressure is seen in the median sales price this month, which increased 4.1%. Our median sales price is now 83% of the $255,000 peak reached in June of 2006.
This significant monthly increase in median price can be attributed to a major imbalance between sup-ply and demand at the lower price points. There were 4,159 homes sold in May below the median sales price and 5,899 active listings without a contract. Our market has an extremely low inventory of homes available to the entry level buyer. The three main contributing factors to this phenomenon:
1. Homeowners who would be considering selling are still underwater
2. Investors who purchased bargain assets at the bottom of our market are quite happy with their improving rents and increasing equities, and are not selling
3. Builders have been cautious and are not building, for May in Maricopa County, only 90 newly constructed homes sold for $211,000 or less
As a side note, I would caution STAT readers in associating a 4.1% increase in the median sales price with a 4.1% increase in home values. We need to look no further than two other pricing metrics to see this is not the case. The average priced home in May sold for $268,693, which was 1.2% higher than the average of $265,470 in April. The average price per square foot is even more telling at $136.08 in May 2015, only 0.46% higher than $135.46 in April. For you peak watchers, our average sales price in May in now 77% of our 2006 peak of $350,400. Our average price per square foot is 71% of the peak total of $190.61 according to The Cromford Report
The ARMLS Pending Price Index (PPI)
Our last Pending Price Index projected a May 2015 median price of $205,000 with the actual median coming in at $211,000, an error of 2.9%. Looking ahead to June 2015, the ARMLS Pending Price Index projects a median sales price of $213,000. We began June with 7,833 pending sales contracts and 4,243 UCB listings giving us a total of 12,076 residential listings under contract. In comparison, at the beginning of May we had 12,291 listings under contract. June 2015 sales volume will undoubtedly exceed June 2014 (7,219), but will be lower than the total of 8,319 in May 2015 as we’re now moving into the final phase of our home buying season. We expect sales this month to be slightly lower than in May, thus projecting 8,000 homes sales in June.
Stats and information courtesy of the ARMLS June Stats Report. Read the entire report HEREPosted by Doug Young on
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