The Cromford Report folks track household formation to see how many new buyers are coming on the market.

I think its an interesting story for Phoenix, in particular. After the recession, we saw young couples choosing to rent longer, or even live with family for a while. Add that to the fact that this new generation of home buyer is coming on the market with higher levels of debt than ever before, and we see the makings of some serious downward pressure on the sub-$200k market.

However, and there is always a however, CenPho and historic neighborhoods are a little different. Well, in regards to sub-$200k, all of the valley is in the same boat. See in my previous post why we have a shortage, sub $200k. But, its particularly difficult in the urban dense areas because more people are moving in to those areas.

I also covered a few months ago how I believe we are over-building apartment complexes at the peril of owner-occupied properties. There is a six to one ratio of apartment to owner-occupied being built in downtown. That seems way off.

I think we will have options for young couples to own their own home if they want it, but we need to build more in-fill and the city needs to find a way to help.  With 43% of the land mass of Phoenix comprised of empty lots, and many of those owners holding to speculate, we need to get some of those properties in the hands of in-fill developers without the prices being prohibitively high.

Watch this trend if you are looking to buy in the next year to year-and-a-half.

If you are looking for more information, please call me at 602-456-9388.

Thanks again to our friends at the Cromford Report for their excellent analysis on all things real estate.

Here are a few highlights:

“For the monthly period ending August 15, we are currently recording a sales $/SF of $132.74 averaged for all areas and types across the ARMLS database. This is 2.0% below the $135.42 we now measure for July 15. Our forecast range was $131.71 to $137.09 with a mid-point of $134.40. Last month’s mid-point forecast was $1.66 above the actual price per square foot measured, but the actual result was well within the 90% confidence interval.

On August 15 the pending listings for all areas & types showed an average list $/SF of $135.41, 0.5% below the reading for July 15. Among those pending listings we have 86.9% normal, 4.7% in REOs and 8.5% in short sales and pre-foreclosures. The average pricing for pending listings within Greater Phoenix on August 15 in each category was: $140.36 for normal, $98.69 for short sales & pre-foreclosures and $89.08 for REOs.

Our mid-point forecast for the average monthly sales $/SF on September 15 is $131.55, which is 0.9% lower than the August 15 reading. We have a 90% confidence that it will fall within ± 2% of this mid point, i.e. in the range $128.92 to $134.18. We have already experienced considerable seasonal price weakness this summer and our forecast this month is for this weakness to continue until mid September at least.”

Single Family Homes and Condos

So, how does that translate in to the Cenpho and historic markets? Well, while we see higher prices than most areas, generally, and tighter supply, we have seen a similar dip in prices. Interestingly, though, we only see that dip when we include condos in the mix, along with single family residences. See below.

Single Family Homes and Condos

Condos typically take longer to sell, as people are weary to take on HOA dues. This could be part of it. It is certainly interesting news if you are in the condo market.

Watch for these prices to go up again after late September.

If you are looking for more information, please call me at 602-456-9388.