Clear Title of Arizona is pleased to provide its clients with the Clear Connections Monthly Market Update. This report will provide you with the latest real estate trends.
Our business is built around the concept of educating and providing the personal service that Real Estate Agents and Lenders have come to depend upon. We want to provide accurate data to our clients, associates and friends. It is intended to keep you informed on critical market trends that affect our businesses.
SINGLE FAMILY HOME
In December 2016, single family home sales increased year over year in three small sectors, with new homes gaining market share once again, though not as dramatically as last month:
- New Homes (up 16%)
- Normal re-sales (up 8%)
- Investor flips (up 8%)
Because of lower distress levels, single family home sales decreased year over year in the remaining sectors:
- GSE – Fannie Mae, Freddie Mac, etc. (down 17%)
- Bank owned homes (down 24%)
- HUD Sales (down 55%)
- Third party purchases at trustee sales (down 24%)
- Short sales / pre-foreclosures (down 44%)
Due to rising prices, the change in total dollars spent on homes was more favorable than the change in the unit count.
- Total dollars spent on single family homes rose by 12% over December 2015
- Total dollars spent on townhouses & condos rose by 6% over December 2015
During December, average single family pricing
edged down slightly, reading $296,907, down from $297,218 last month but up from $283,120 in December 2015. Average new single family home prices during December were 5.0% higher than last year while the average new single family home size has declined by 0.7% over the past 12 months.
MEDIAN SALES PRICE
The median sales price rose 5.1% from $234,095 in December 2015 to $246,000 in December 2016.
NEW HOME SALES
December was yet another very strong month for new home closings. Newly-built single family homes saw 1,714 closings in December, up 16% from 1,479 in December 2015. This is easily the highest total for new homes since the housing crisis. The total dollar value of single family new homes closed in December was up 22% from $511 million in 2015 to $622 million in 2016.
The average sq. ft. of a new single family home in December was 2,459, down 0.7% from 2,476 in December 2015. More builders are starting to offer options at entry pricing levels, although many of these are a long way from the center of the valley. The average sq. ft. of a non-distressed resale was 1,990, so new single family homes are 24% larger on average than the existing homes that sold. The market share (in dollars) for new single family homes has climbed from 23.2% in December 2015 to 25.2% in December 2016.
DEMAND
Total price for single family homes sold in October.
Total single family, townhouse & condo sales were up 5% in December from a year earlier. Single family sales rose 7% and townhouse / condo sales fell 5% compared to December 2015.
Single family homes priced over $500,000 took 23% dollar market share, the same as last year. There was a 17% increase in unit sales over $500,000 but slightly softer pricing meant a 15% increase in dollar volume. Entry level single family homes under $200,000 lost market share from 20% to 16%, partly due to low supply, although this shortage has eased in the West Valley. The mid range between $200,000 and $500,000 has robust demand and reasonable supply and grew market share from 58% to 60%.
Numbers reflect single family homes only.
AVERAGE PRICE PER SQUARE FOOT
Average price per square foot for single family homes gained 5.2% from $135.05 in December 2015 to $142.07 in December 2016.
SUPPLY
The number of active single family listings without an existing contract was 14,919 for the Greater Phoenix area as of January 1, 2017. This is down 7.3% since December 1. The inventory of single family homes under $150,000 stands at 39 days, 5% lower than a year ago. Overall we have seen 4.7% more new listings created in 2016 than in 2015, but this was insufficient to match the increase in demand. We have seen active listing counts rise during the first few weeks of 2017, but much less than they did in
2016. New supply has been stronger at the upper price points but remains inadequate below $200,000. In the mid range between $200,000 and $500,000 we are seeing adequate supply but current demand is more than strong enough to cope with the new listings and supply is tightening in the most popular areas. Supply has been stronger in the West Valley recently and weakest in the Southeast and Pinal County
CHANGES IN TRANSACTION MIX
We saw an increase in non-distressed transactions (up 8%), with investor flips up 9%. New home sales were up by the highest percentage at 16% but distressed transactions fell 32%. We saw a 24% decline in third party purchases at trustee sales and new notices of foreclosure remain at very low levels. Reversions to lenders decreased by 36%.
