{"id":896,"date":"2019-08-15T22:44:18","date_gmt":"2019-08-15T22:44:18","guid":{"rendered":"https:\/\/nohasslelistingblog.com\/?p=896"},"modified":"2019-08-15T22:46:10","modified_gmt":"2019-08-15T22:46:10","slug":"record-breaking-market","status":"publish","type":"post","link":"https:\/\/nohasslelistingblog.com\/?p=896","title":{"rendered":"Record Breaking Market?"},"content":{"rendered":"

\u201cThis is now an exceptionally strong market with no sign at all of the weakness we were seeing between September and February.\u201d\u00a0 Michael Orr of \"\"the Cromford Report<\/em><\/p>\n

If you are someone who prefers headlines over articles, the above quote summarizes the valley\u2019s current market.\u00a0 For those who prefer more details, read on.<\/p>\n

We entered 2019 with sluggish demand that had taken root in the final quarter of 2018.\u00a0 All signs and numbers supported the fact that we were headed for a balanced market.\u00a0\u00a0 That is until March of 2019 when demand awoke and began reversing trends with vengeance.\u00a0 So what is driving this demand?\u00a0 We can only speculate but there are certainly some likely suspects.<\/p>\n

Interest rates <\/strong>\u00a0Interest can impact the market as they directly affect affordability.\u00a0 By November of 2018 Interest rates hit an average 30-year mortgage high of 4.94%.\u00a0 Fast forward to March and rates had come down almost 1%.\u00a0 As of this writing they are in the 3.75% range.\u00a0 That increases buyer\u2019s buying power considerably and certainly seems to be fueling this demand.<\/p>\n

Rental rates<\/strong> \u00a0When it is cheaper to buy than to rent, the first time home buyer market jumps.\u00a0 This is incredibly impactful as the first time buyer drives the housing market \u2013 creating a domino effect allowing for their home seller to in turn purchase their next move up home, and so on with an average chain of seven sales. It is easy for headlines to skip the rental market and focus solely on the resale market but the valley\u2019s rental market is noteworthy. \u00a0To quote the Cromford Report:<\/p>\n

\u201cIn June, the average monthly rent per sq. ft. was $1.01 for listings closed through ARMLS. This [is] the first time we have recorded a figure over $1.<\/em><\/p>\n

In June 2006 the average monthly rent was only 71 cents per sq. ft., so rents have increased by 42% since then. In comparison the average purchase price per sq. ft. has moved from $188.53 to $172.02 since June 2006, a fall of 9%.So average rent has increased 42% while purchase prices have fallen 9% since June 2006 on a cost per sq. ft. basis.\u201d<\/em><\/p>\n

Job market<\/strong> \u00a0The valley\u2018s long term job creation averages around 40,000-50,000 new jobs yearly.\u00a0 However 2018 saw a jump in new jobs to 86,800 according to labor statistics. In fact only Orlando had greater job growth in 2018.\u00a0\u00a0 Jobs bring people and people need housing.\u00a0 Simple.<\/p>\n

Affordability <\/strong>We may get eye rolls with arguing for affordability in a market that has seen such a strong recovery in pricing and appreciation since 2011.\u00a0 But it is worthy to note that Phoenix is the 5th<\/sup> most populous city in the country.\u00a0 Our median sales price of $279,000 is unheard of in cities of our size.<\/p>\n

What about supply?\u00a0 We would be remiss to not comment on the other half of the supply\/demand equation.\u00a0 \u00a0Supply hasn\u2019t been abundant for years, so it is easy to dismiss low supply and focus solely on volatile demand.\u00a0 But factually, June was notable for the low numbers of sellers coming to market.\u00a0 As Michael Orr of the Cromford Report shares (emphasis added):<\/p>\n

\u201cThe most unusual change during June was the 8.5% drop in active listings \u2026 which lurched from 5.3% higher than 2018 on June 1 to 4.1% below 2018 on July 1. Much of this decline was due to the low number of listings activated during June – 8,731 is our current count, the second lowest number for June since 2001 and down 11% from June 2018. <\/u>On top of a very busy month for contracts and closings this has caused the supply to tighten dramatically\u2026.This is the greatest imbalance in favor of sellers that we have seen in almost 6 years.<\/em><\/p>\n

Not surprisingly this is pushing up pricing.\u00a0 As the Cromford Report further reports:<\/p>\n

\u2026The monthly median sales price of $279,000 is a new record high. The annual median sales price is also at a new record high at $268,000.<\/em><\/p>\n

But before you celebrate (or begin having sleepless nights over another \u201cbubble\u201d in housing) there is a secondary set of numbers that typically are more accurate on tracking value.\u00a0 Read on\u2026<\/p>\n

Average price per sq. ft. is nowhere near setting a new record, because the homes being sold today are much larger than those being sold at the last peak. The monthly average $\/SF record is $190.05 set in May 2006. We edged up very slightly to $172.30 from $172.01 during June.<\/em><\/p>\n

There are no indications we are in a bubble.\u00a0 Rather, we simply have a very strong sellers\u2019 market underway.\u00a0 Will it last?\u00a0 History says no.\u00a0 Supply and demand are a seesaw that affect each other.\u00a0 Short supply causes prices to rise.\u00a0 As prices rise, demand tends to falter allowing for a rebalancing of supply.\u00a0 The question is when.\u00a0 As always, we will continue to report the market trends as they unfold.<\/p>\n

Russell & Wendy Shaw<\/p>\n

(mostly Wendy)<\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cThis is now an exceptionally strong market with no sign at all of the weakness we were seeing between September and February.\u201d\u00a0 Michael Orr of the Cromford Report If you are someone who prefers headlines over articles, the above quote summarizes the valley\u2019s current market.\u00a0 For those who prefer more details, read on. We entered […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-896","post","type-post","status-publish","format-standard","hentry","category-market-stats"],"_links":{"self":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/896","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=896"}],"version-history":[{"count":1,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/896\/revisions"}],"predecessor-version":[{"id":898,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/896\/revisions\/898"}],"wp:attachment":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=896"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=896"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=896"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}