The market is just on fire..November 2021. Yes we are beyond "hot".. so the real estate market in Arizona is beyond the "hot" pun phrase.
Market Notes for Home buyers and those following the Arizona Real Estate Market -First Quarter 2021
Price record shattered - 15 years ago, the record monthly average sales price per sq. ft. across the entire ARMLS database was $190.61, set on May 5, 2006. The Phoenix Metropolitan area exceeded that level for the first time on August 2020 and we are now over 263.00psf.
It only took until October 2, 2020 to exceed $200psf and then $210psf was passed on November 23, 2020.
So in the span of just over 6 months prices have gone up $34 on the average price per sq. ft; a rise of over 17% in half a year. Update Nov 1st 2021 - we are up to over 263.00 psf average in the Phoenix metro area.
With as high as demand is, it is interesting to note, many home-buyers are "on the fence" waiting for a slow down .. so interestingly enough, in addition to the current market of anxious home buyers, there is a substantial underlying market waiting to jump in. In terms of a 'foreseeable slow down', of course a slow down is very possible but at the current moment there are no factors that would lead one to that conclusion. With the Market Index about to exceed 500 for the first time in the next few days, the speed of appreciation is on trend to step higher, not lower. Noting for those Homebuyers that may be holding their breath for dramatic price decreases - "don't "... typically, even if the market were to crash tomorrow, historically it takes the 'sellers market' many months and years to inch lower.
Let's look at the market (as described above) in terms of graphs and charts.
This is what the composite CMI referenced above looks like :
The 'bank grade' Collateral Analytics 5-year Forecast agrees for the next couple of years:
And here's what the current relative breakdown across 17 cities in the Metro looks like:
A MI of 100 represents a balance between supply and demand.
A MI over 100 represents the degree to which it's a sellers market - demand exceeding supply.
The green arrow (up) shows a month-over-month increase in the supply/demand imbalance favoring sellers.
The red arrow (down) shows a softening in the supply imbalance.
If you look carefully at the chart below; there is less than a 2 week supply homes priced under 500,000.
The picture improves somewhat, with at least a 1 month supply, as you go up in price to $600,000 range and under a 6 month supply over 3 million. Noting- There is no time in the last 15 plus years when there has been less
than a 6 month supply of homes over 3 million. Definition Break -"Supply" what supply means is; if there were no new homes listed on the market in the respective price categories, it would take only that number of days. weeks for all of those homes to sell.
The chart below shows- The combined months of supply using greater Phoenix -Scottsdale
and Paradise Valley. Overall , there is less than a one month supply.
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