Here’s your July Market Update.
As usual, our friends at the Cromford Report give us the broad outlines for the entire state. Highlights:
“The market conditions improved a little for sellers during June, with the Cromford® Market Index breaking through the 140 level as we enter July. However there is no dramatic new trend, just a continuation of what we have been seeing for several months now. Sales volume was strong during June but it is clear that July will be much quieter for closings since the number of homes under contract has fallen quite a bit. This is quite normal for the season.
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The ranges from $200,000 to $350,000 saw strong growth in closed sales over June last year – up almost 19%. Between $350,000 and $400,000 we saw a little weakness, down 2%, but sales from $400,000 all the way up to $1.5 million were strong – up an impressive 21%. Sales over $1.5 million were very much weaker than last year – down 44%. Sales below $175,000 were also well down, but this was caused by a lack of supply. The segment over $1.5 million cannot use that excuse. There are plenty of homes available, even though a large number have been removed from the market for the summer. Many of these are likely to be relisted at the end of September.
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We expect overall prices to be flat to slightly lower over the next 3 months as luxury homes make a smaller contribution when the temperatures exceed 100 degrees. Prices are still rising below $200,000 and falling for most homes over $1 million.”
When we look at some of the indicators for Central Phoenix for the July Market Update we continue to see a strong market, as folks really want to live in central.
The chart, above, shows that the price per square foot for detached residential as well as for condos is steadily climbing. No upward bursts that would indicate a bubble.
The chart here shows the contract ratio. That is the ratio of homes on the market that actually close. We are in a hot market when we are over 60%. So, we are right in line with last year, this time.
Anecdotally, we are seeing a lot of renovations. At first we could not figure out how these renovators were making money with the market so high. How can they purchase a property, renovate it and still make a profit.
Then I realized that they are getting low-priced homes from people who respond to those offers they get in the mail to purchase their homes. You know, the ones that say “I love your house and I’ll pay you cash to leave it.” That kind of deal.
But for the numbers to work out, the renovators must be getting these homes pretty cheap, by comparison to what the market will bear.
That tells me that they did not have representation from a realtor. Because they certainly would not have let their homes go for this cheap.
If you get a letter in the mail claiming that somebody wants to buy your house today for cash, please call us at 602-456-9388 and we will help you negotiate a better deal.
