Market Update October 2020

Let’s start with the stats! Here are the ARMLS numbers for October 1, 2020 compared with October 1, 2019 for all areas & types:

• Active Listings (excluding UCB & CCBS): 8,101 versus 13,755 last year – down 41.1% from last year, but up 0.9% from 8,028 last month.
• Active Listings (including UCB & CCBS): 13,305 versus 17,592 last year – down 24.4% from last year, but up 1.0% compared with 13,178 last month.
• Pending Listings: 7,999 versus 6,011 last year – up 33.1% from last year, AND up 1.4% from 7,892 last month.
• Under Contract Listings (including Pending, CCBS & UCB): 13,203 versus 9,848 last year – up 34.1% from last year, AND up 1.2% from 13,042 last month.
• Monthly Sales: 9,667 versus 8,022 last year – up 20.5 from last year, AND up 4.9% from 9,213 last month.
• Monthly Average Sales Price per Sq. Ft.: $198.68 versus $169.60 last year – up 17.1% from last year, and up 1.9% from $194.98 last month.
• Monthly Median Sales Price: $327,000 versus $279,500 last year – up 17.0% from last year, and up 0.6% from $325,000 last month

According to the Cromford Report, “The flow of new listings was strong throughout September, with roughly 17% more listings posted than in September 2019. However, this did not result in much change to the available supply. This rose a barely perceptible 0.9% which is in line with normal seasonal trends.”

Regardless of a severe shortage of listings, ARMLS data analyst and commentator, Tom Ruff, is still projecting 2020 to be a record setting year for home sales in Maricopa County. In the most recent ARMLS Stat review, Ruff stated, “The deficit in year-over-year sales in April and May impacted the numbers, but the anomaly will most likely be fully erased in October. And when our final sales figures for the year are reported on January 1, the 2020 real estate market will have surpassed everyone’s expectations.”

One of the major factors fueling the current real estate market are the historically low interest rates available to home buyer’s right now. These rates have essentially made homes more affordable despite rising prices and they have allowed for an increase in buying power. According to a recent Forbes article, these interest rates “have made buying a home the most affordable it’s been since 2016.”

Even with record setting sales and interest rates at unprecedented lows, many clients continue to ask us if we think this is another housing bubble. While we can’t deny that a market correction is bound to happen at some point in the future, experts aren’t predicting it to happen any time soon.

In addition to low interest rates, the current market is being fueled by an increase in demand and a severe lack of supply which is markedly different than the factors that caused the “bubble” in the mid-2000’s. A surge in population growth in Arizona is a major contributing factor to the shortage of homes for sale. According to a recent AZ Big Media article, Arizona tends to be one of the top places that people are moving. With over 63% of all moves being inbound in Arizona last year, it doesn’t look like our market is going to take a dive anytime soon. People from places such as California, Colorado, Texas, Florida, Illinois, and Washington have been relocating to Arizona in record numbers seeking things like better weather, more space, lower taxes and more affordable homes.

So what is our advice to you based on this month’s market report? If you are thinking of buying or selling, NOW is the time to do it! Whether you are relocating to the Valley of the Sun or just looking to make a move within the Phoenix Metro area, our team of experience agents at azarchitecture is available to help you. We can help you find a home or price yours to sell. Feel free to reach out to us directly at info@azarchitecture.com for any of your real estate needs.