This week in Phoenix real estate…it’s not exactly news that that there aren’t enough houses to go around. What might be surprising is how quickly the lower price ranges are changing.
Homes on the market, priced under $400K, are down 47.6% compared to last year. However, homes priced between $400K-$500K are up 109% overall, and a whopping 451% in Pinal County. That “entry level” price range is rapidly shifting upward.
Looking at condos – that quintessential starter home – to say that pickings are slim is a massive understatement. Overall, condo listings are down 36% compared to last year, which doesn’t sound so bad until you look at active listings. A grand total of 219 condos are on the market right now (that number dropped by 4 while I was writing the post!). The median asking price – $375K!! At first glance, this is inexplicable considering the median sales price since Jan 1 is only $285K. But there are number of luxury condo developments going up with prices as high as $6.8M. OK, so what about the non-lux condos? There are only 139 condos priced under $400K, 39 of which are in active adult communities. That leaves just 100 regular old condos that may or may not accept financing. Yikes!
A whopping 252 townhomes are currently for sale at a median price of $399,900.
Again this week, I heard several iterations of “just wait until prices come down”. I even watched a Youtube video by one of many click-bait “experts” who advised against buying this year because builders are massively overbuilding, so, he ominously forecasts, a crash is eminent. One of his followers stated in the comments that he had been predicting a crash since 2018. Well, the market hasn’t. If you had bought a median-priced home in 2018 instead of listening to these baseless predictions, you’d be sitting on almost $200K in equity.
As long as supply levels are this low, no matter what, prices are going to climb. Tina Tamboer of the Cromford Report states that until active listings reach the 16,000 – 24,000 range, prices will continue to increase. Looking at our current supply numbers, folks, we have a ways to go.