Supply between $200K-$250K has Risen 8.1% since May
Seller Price Reductions Up 7% in Popular Price Range
If your budget lies somewhere between $200,000 and $400,000 for a home, there’s good news for you. Supply between $200,000 and $250,000 has been rising gradually over the past 12 weeks. After dropping 15% from 2,300 listings in January to 1,944 in May, it has since risen 8.1% to 2,101 listings in August, placing it only 6.7% below last year’s count instead of 18% below like it was 3-4 months ago. Listings between $250,000 and $400,000 have also risen sharply 5.3% from 4,791 to 5,044 over the past 4 weeks, placing them only 0.2% below last year’s count of 5,053 listings. The increase in competition has resulted in a notable 7.3% increase in weekly seller price reductions from an average of 778 per week in June to 835 in July. 56% of year-to-date sales in Greater Phoenix have been between $200K-$400K so this increase in supply should come as a little bit of relief for the majority of buyers.
If you have a home listed between $200,000 and $400,000, then you make up 48% of everything that’s listed in the MLS. Listings under contract in this price range have averaged 7.4% higher in volume than 2017 all year, until now. Over the last two weeks, including the end of July through the first week in August, listings in escrow have dropped to 2.2% below last year’s level. Buyer activity is expected to slow seasonally from the peak in April through the end of the year; however open contracts have dropped 26% since the 2018 April peak compared to a lower 20% drop in 2017 over the same time frame; all while corresponding supply has been rising. Sellers haven’t seemed to notice this sharper decline as their average asking price per square foot has soared from just 3% higher than last year in March to as high as 7% higher in July. The average sales price per square foot was up 5.9% in July, compared to 4.6% in June. However, price is a lagging responder to shifts in supply and demand. We will have to wait and see if buyers accommodate sellers’ price expectations given that they have more to choose from in the marketplace right now.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report