Market Update December 2020

WHEW! What a year it has been! In a year of complete uncertainty, one thing has remained certain – real estate is a good investment!

We’d like to start this final market report of 2020 by taking a quick look at the stats. These are the ARMLS numbers for December 1, 2020 compared with December 1, 2019 for all areas & types:

• Active Listings (excluding UCB & CCBS): 7,388 versus 13,869 last year. Down 46.7% from last year, and down 14.9% from 8,682 last month.
• Active Listings (including UCB & CCBS): 12,481 versus 18,322 last year. Down 24.1% from last year, and down 10.2% compared with 13,901 last month.
• Pending Listings: 7,347 versus 5,864 last year. Up 25.3% from last year, but down 6.6% from 7,862 last month.
• Under Contract Listings (including Pending, CCBS & UCB): 12,389 versus 9,572 last year. Up 29.4% from last year, but down 8.2% from 13,081 last month.
• Monthly Sales: 9,205 versus 7,131 last year. Up 29.1% from last year, but down 3.6% from 10,024 last month
• Monthly Average Sales Price per Sq. Ft.: $207.71 versus $179.92 last year. Up 15.4% from last year, and up 0.2% from $207.71 last month.
• Monthly Median Sales Price: $330,000 versus $281,000 last year. Up 17.4% over last year, but down 0.6% from $332,000 last month.

Per ARMLS data analyst Tom Ruff, we already broke records in November and are on track to do the same in December. According to Ruff, “We begin December with 28.2% fewer homes for sale today than we saw one year ago, with many areas showing record lows for the number of homes available. At the same time, demand increased 27.4% year-over-year, with ARMLS reporting the highest sales volume for any November in history. Low supply and high demand can only mean one thing: higher prices. The average sales price was up 18% and the median sales price rose 16.8% yearover-year…. My guess, sales volume in December will approximate 9,500. The highest sales volume ever in December occurred in 2010 when ARMLS reported 8,401 home sales. When the December sales are reported we will see another new record.”

If you have been keeping up with our monthly market report, you will notice that we have set or broken records many months in 2020. How is this possible to keep breaking records month over month during a pandemic? It seems that much of it is due to the inbound migration from other states to Arizona. Per the Greater Phoenix Economic Council, nearly 70,000 people move to Arizona from California each year to take advantage of the lower cost of living, affordable housing options, and lower income and property taxes.

Because no one has ever seen a market quite like this one before, it is understandable how some people might feel uneasy. It might even make some people wonder if and when the market will “crash”. While it is true that no one has ever seen a market exactly like this one before, experts have been tracking data in the real estate market for a very long time. And, data doesn’t lie. What data does is show us patterns that will most likely occur in various scenarios, even this one.

A deeper dive into the historical data will show that in order for the market to crash like it did in the mid-2000’s, we would need the number of active listings to exponentially increase and the demand for homes to drastically decrease. Fortunately, this does not seem to be happening any time soon. Tina Tamboer, Senior Housing Analyst with The Cromford Report, does a good job of explaining why. Tamboer states, “Because population growth has consistently outpaced housing growth every year over the past 10 years, rents and values are projected to continue rising through 2021 in Greater Phoenix unless builders are able and willing to ramp up production at ludicrous speed.  They are doing their best, but even 25,549 permits issued and 19,889 sales closed on brand new single-family homes through October this year hasn’t proven to be enough to satisfy the level of demand for housing that has descended on Greater Phoenix.  Sellers need not worry about their home values declining anytime soon.”

So, if you are thinking of selling your home in Phoenix, Scottsdale, Paradise Valley, Cave Creek, Carefree, Chandler, Mesa, Gilbert, Peoria, Glendale, Avondale, Sun City or any of the surrounding areas NOW is the time to do it! We have a team full of experts that are familiar with the market. Contact us at info@azarchitecture.com and we will put you in touch with the agent most familiar with your area and/or type of home.

If you are thinking of buying a home, it is still a great time as home values are still appreciating! However, in this market, it is imperative to have an agent who knows how to get a contract accepted and a deal closed. Our team stays on top of the market to ensure that their clients have the best shot at getting the home they want even in these crazy times!

While there were many negative things that came out of 2020, we plan to take a few of the positive things with us into 2021, like this booming real estate market! We are so thankful for our team of agents (aka essential workers) and clients like you that have stuck with us through the madness. Cheers to a brand New Year full of health, happiness, and cool architecture to call home. Bring it on 2021!