Unsurprisingly, the market is still strong. Prices, valley-wide, are inching upward, ever upward.
According to our friends at the Cromford Report, “For the monthly period ending November 15, we are currently recording a sales $/SF of $175.52 averaged for all areas and types across the ARMLS database. This is up 2.5% or $4.22 from the $171.30 we now measure for October 15.”
The number of active listings, valley-wide has been dropping dramatically since the middle of the year, even going as far back as the end of 2018 if you look at just the CenPho zip codes.
I like to look at the CenPho zip codes, because those are dominated by historic neighborhoods, density and urban living.
Even the Cromford Index has started moving upward again, after a slight stall in October.
For those of you who don’t know, the Cromford Index is a measure of whether it is a seller’s market or a buyer’s market, and by how much. Everything over 100 is a seller’s market. Under 100 is a buyer’s market.
The Cromford Index is a strong predictor of where the market is going. If it takes a tumble, be ready for price drops in the next couple months, even if prices are going up at the time the index begins to drop.
So, what does this mean?
First, we need more owner-occupied construction, generally, but particularly in Central Phoenix. The massive push under the last two mayors for downtown in-fill resulted in lots of apartments, but hardly any new owner-occupied construction. This was a major failure.
I’m not one of those realtors who thinks everybody needs to buy a house. But, there needs to be a healthy mix in any area so that people feel an attachment to a neighborhood.
I predict this lack of attachment to downtown will become a problem for Phoenix in the next 10 years.
Second, because there is such a shortage of inventory, seller’s who want to sell should take action. You will get top price for your listing.
Third, if you are a buyer on a tight budget, you are probably going to have to look a little further out of downtown.
There are many of us who believe that this shortage has been caused by large companies purchasing homes for short-term or long-term rental, thus taking them out of regular circulation.
This is a huge problem and will continue to be until there is some change to the dynamic.
Watch for the beginning of 2020 to bring more of the same.
If you need help building a strategy to buy or sell a home, contact us at 602-456-9388.
