Expect slower activity around the holidays, but a boost in the near year as all those people who were put to sleep by turkey, or were busy hiding their elf on the shelf all December decide to get active again.
Here are the basics – the ARMLS numbers for December 1, 2023 compared with December 1, 2022 for all areas & types:
Active Listings (excluding UCB & CCBS): 15,981 versus 19,155 last year – down 17% – but up 4.8% from 15,247 last month
Active Listings (including UCB & CCBS): 18,050 versus 21,206 last year – down 15% – but up 4.0% compared with 17,364 last month
Pending Listings: 3,798 versus 4,301 last year – down 12% – and down 2.9% from 3,911 last month
Monthly Sales: 4,616 versus 4,928 last year – down 6.3% – and down 11% from 5,210 last month
Monthly Average Sales Price per Sq. Ft.: $288.97 versus $272.29 last year – up 6.1% – but down 2.1% from $295.13 last month
Monthly Median Sales Price: $439,000 versus $420,000 last year – up 4.6% – and up 0.9% from $435,000 last month
After rising during October, and peaking at an average just over 8% mid-month, mortgage rates declined thereafter and tumbled throughout November. In theory this should have injected some life into housing demand, but there is precious little evidence of this in the numbers above. We have fewer homes under contract than last month and far fewer than a year ago, when we were all depressed about the low demand. Sales counts are also down from last year and last month reaching the unusually low level of 4,616 in November.
One reason for the severe lack of demand may be that home prices are noticeably higher than a year ago, something few people were predicting 12 months ago. Over the last months there were mixed signals. The median sales price grew almost 1% but the average price per square foot dropped by over 2%. This followed a sharp in crease the month before. When this happens it is usually caused by the luxury market. With much lower unit volumes, the luxury market can vary a lot month to month and the effect on the $/SF can be substantial. The luxury market has negligible effect on the median sales price. The median sales price tends to be strongly influenced by unit volumes at the low end. Despite the weak demand, supply is still below normal which is preventing prices from tumbling. Supply has risen for several months but is now stable again as few people list there homes in December and several take their homes off the market for the holiday season. We anticipate more supply appearing in January.
The new home market continues to outperform the re-sale market. Mortgage rate buy-downs have kept new home demand at a healthy level.
December is not usually a month for us to see a flood of new home buyers, so we anticipate the the second half of January will tell us whether buyers see a big difference between mortgage rates around 7% compared with 8%. The last 12 months have been full of surprises, so caution and watching the statistics carefully is still the order of the day.
Co-op living is great if you need a space that is maintained like an apartment, but you want to own it. Its great if you don’t expect to be nearby all the time. It’s also great if you like a strong and secure community. The one thing to always remember is that co-ops are always cash only, since you are buying what amounts to a share in a corporate entity. Another thing to remember is that the HOA fees seem really high. However, they cover so much more than most HOAs, often including utilities and taxes.
The price of our listing in midtown has come down a bit and the sellers are very reasonable, though not in a rush. So, have a look.
520 W. Clarendon Ave, Unit G2. $286,000, 2br/1.75 ba, 1,320sf. There are a few pristine co-op apartments still in central and downtown Phoenix. Most were built in the 1960s and only a few maintain that mid-century charm. This is one of them. But, on top of that, the owners of this unit opened up the kitchen since and completely remodeled since they purchased the home in 2021. This home is being sold with all of the unique furniture, as an option for the buyer. This secure community is just steps from dining, light rail and shopping. You can lounge in the pool or chill in the historic commons knowing that your investment is being maintained and cared for as a co-op uniquely is. See the listing and more photos here.
No lie, 2020 did a number on Phoestivus. Attendance dropped when we came back in 2021.
Then some faceless developer took our old spot at Central and McKinley to build yet another apartment building with ground floor space full, not of local shops, but with treadmills and exercise equipment.
Do I sound bitter?
Well, about the multitude of community-killing apartments, yes. But not about Phoestivus.
On that I’m bullish.
Despite the setbacks, we grew stronger and we survived. Phoestivus is back and bigger than ever. It now runs Thursday, Friday and Saturday morning, December 14th – 16th.
It is getting more and more like the old German Christmas markets of my youth, which partially inspired Phoestivus back in 2010.
We have an opportunity this year to remind folks why they came, but also to introduce Phoestivus to the thousands of people who have moved in to downtown since we were at the old location.
I’m excited to say that the original Hipster Santa is back!
If you know, you know. And if you know, you are excited by the news.
In addition, we have many of the favorites. We have the Pheats of Strength, the Phoestivus Pole, the Airing of Grievances, food trucks, local beers, and of course over 150 vendors.
Share a ride because parking might be a challenge.
This is the sweet time of year, yeah? I’ve got some great reads and fun events for you.
Your Brain on the Internet. I’m not sure how many of y’all take my suggestions for interesting reads or viewings. But if you don’t usually, I encourage you to watch this video. It’s from one of my favorite science-related YouTube channels, called Kurzgesagt, and it describes what scientists have recently learned about how the Internet affects our brains, how it is breaking down our social order, and what we can do about it. Left, right or center, this is worth a watch.
Cosmic Sleighride. Climb aboard your cosmic sleigh with your host Shiny the Star on a mystical holiday adventure that is out of this world at Cosmic Sleighride produced by World of Illumination. Shoot past the sun, race among the stars and pass through Kris Kringle’s celestial portal where toys prepare for launch. Orbit around a team of astro elves hoverboarding through the cosmos as you enter the stratosphere of Santa City, where all the holiday magic happens. Hold on to your seat — you’re in for one stellar ride.
You Can Choose Your Local Power Company’s Board of Directors. SRP has severely restricted residential solar an is installing over 2,000 MW more of dirty methane gas. They are ignoring climate science. You may have the right to vote in the Salt River Project election in March and not even know it. Even parts of APS territory used to be SRP territory and you still may have voting rights. For instance, I live at about Central and McDowell, I’m an APS customer and I can vote in the SRP board election. Funny how they don’t advertise that, huh? Even if you are not certain, go ahead and register at this link and find out. You can see a map of the SRP voting districts at this link. Be sure to scroll down to see it.
Lawn Care Going Electric. If you own a home, there is a good chance you either mow or blow your lawn or desert garden. Gasoline-powered lawn and garden equipment, which don’t have pollution controls, often emitas much pollution in an hour as driving hundreds of miles in a car. Let’s set aside for a moment the war machine-level of noise that leaf blowers set off when they invariably start going on a Saturday morning in your neighbor’s yard. =These things are a huge contributor to Phoenix air pollution and one of the reasons that we are usually in the top 5 or 6 most polluted cities in the nation. Lawn equipment alone in Arizona contributes 985 tons of nitrogen oxide and 333 tons of particulates, which are small enough to invade your lungs. You can learn on this website about ways that you can push our local government to encourage a move to clean, quieter electric lawn equipment.
While we are on the topic, please take a moment to tell the Maricopa Association of Governments what you think they should do to help reduce air pollution at this public survey. The results will help them build a Climate Action Plan and access tens of millions of dollars from the federal government.
Lights on the Farm.Lights at the Farm and Vertuccio Farms have partnered together to bring Arizona’s Largest Walk-Thru Synchronized Light Show. Come on out and unwrap new traditions and make memories with your family and friends as you make your way through the dazzling lights, larger-than-life lighted displays, mesmerizing tunnel of lights and so much more. Lights at the Farm offers a holiday entertainment experience for all ages. They’ve decked the farm with 2 million dazzling lights, brilliant decor, and inspiring displays to create a Christmas light show. Each display is synchronized to a variety of Christmas classics that will have you singing along. It is stretched out over 10 acres; these dazzling lights will take you through a spectacular journey that will delight your senses and put you in the Holiday spirit.
Did we Abandon the Greatest Economy in History? This is relevant to why so few people can afford a house now, at least the long term view of it. This is a great article on the history of the political shifts that took us from economic domination in the 1950s to space where the disparity of income is about as large as it was during the gilded age. Hint: if you are thinking its an all-left or all-right account of history, you’d be wrong.
Clean Energy Jobs in AZ To Date. Expect the Arizona economy to grow and people to continue to want to move here, as Arizona is now an EV manufacturing state and clean energy jobs are growing. Since the passage of the Inflation Reduction Act (IRA), we’ve seen more than 13,000 new jobs in Arizona, from about $12 billion in investment. As you can see in this data, Arizona is becoming a battery manufacturing powerhouse, according to the latest report from Climate Power. As you think about whether to buy or hold in Arizona, this lends support to long-term investment.
How to Shop Local with Ease. Local First Arizona has a great online shopping portal so that you can support local businesses with a click of a few buttons. Many Phoestivus vendors are on the portal, as well. So, if you don’t feel comfortable in the crowd, you can still delight your friends and family with original gifts. 30% more of your dollar goes to support local police, fire and community services when you shop local.
Southwest Gas is the new Marlboro Man. Well, more specifically, the methane gas industry is the new version of that 1960s doctor telling you smoking is good for you. Recent reporting from NPR revealed that the “natural” gas industry quite literally used the Tobacco industry playbook to mislead the public about the health threat of gas stoves. The American Gas Association (AGA) hired the Tobacco industry’s go-to public relations firm and the same industry-friendly researchers to deploy the same tactics to cast doubt on the science. These tactics continue to this day — the AGA hired a Tobacco-linked consultant to sow doubt about the science earlier this year.
Why aren’t we Recycling Lithium Batteries? The best way to avoid opening more lithium mines is to recycle more. After all, we recylce 99% of lead-acid batteries from cars. Why is less than 5% of all lithium recycled? Is it because the government started requiring car batteries be recycled back in the 1960s, but now anybody can sell lithium batteries and leave society with the cost of finding more? Here’s an informative treatment on what’s going on. The EPA has a nice primer on lithium mining here, too.
I’ll leave you with this thought. Critics of climate change policy claim that China pollutes more, so they should fix the problem first. Set aside that this is only true if you look at today. Over the last 150 years, the US has added about 4 times as much carbon to the atmosphere as China. Once we look at current investment in renewables –and the potential to capture more global market share in clean energy manufacturing and technology–, you can see that the US is giving up its leadership position to China. China invests about $266 billion per year in renewables. The US sits at about $115B, with a much larger economy. Who’s winning that space race now and who is ceding leadership? (Source: Bloomberg)
As you may know, I serve on the Advisory Board of Voter Choice Arizona (VCA), a non-partisan, nonprofit that, for the past three years, has been educating Arizonans about election reform and the incredible benefits it can bring to our state by giving Voters more voice and more choice.
VCA’s sister organization, Better Ballot Arizona (BBA) has recently filed for a citizen’s initiative that, when passed, will equalize signature requirements for all candidates, establish a single, non-partisan primary, and allow voters to use Ranked Choice Voting in a top-5 general election.
If you don’t know about how these reforms can reduce negative campaigning, eliminate the “spoiler effect,” and lead to better governance, please invite the VCA team to share their presentation with you and your friends, or meet up for a one-on-one conversation.
If you already understand how better ballots can improve our elections, please consider joining me in donating to Better Ballots Arizona. They have a $10k match from a donor that expires on October 31.