How You Can Take Advantage of the Phoenix Real Estate Market

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February was an excellent month for the real estate market in and around Phoenix. There were improvements for sellers across the majority of price ranges and geographic areas, but the main exception was the luxury market, where supply has been growing and demand has been diminishing.

Here are the basic ARMLS numbers for March 1, 2015 relative to March 1, 2014 for all areas & types:

• Active Listings (excluding UCB): 23,541 versus 26,589 last year - down 11.5% - and down 1.7% from 23,950 last month
  
• Active Listings (including UCB): 27,315 versus 29,613 last year - down 7.8% - but up 0.8% compared with 27,095 last month
• A total of 9,307 homes came on the market in 2015, compared to 9,908 in 2014
• Pending Listings: 6,709 versus 6,462 last year - up 3.8% - and up 25.1% from 5,631 last month
• Under Contract Listings (including Pending & UCB): 10,483 versus 9,486 last year - up 10.5% - and up 30.5% from 8,776 last month
• Monthly Sales: 5,982 versus 5,444 last year - up 9.9% - and up 24.9% from 4,790 last month
• Monthly Average Sales Price per Sq. Ft.: $130.08 versus $127.38 last year - up 2.1% - but down 0.6% from $130.86 last month
• Monthly Median Sales Price: $195,000 versus $182,000 last year - up 7.1% - and the same as last month

 The rise in the under contract count over last year - up 10.5% - understates the magnitude of the improvement because it includes all areas and types of homes.The balance between supply and demand has altered the most for the price ranges between $75,000 and $800,000. Outside that price range, things don't look like they are improving much at all. 

The luxury market has certainly weakened, but it has had a very good run for the past 2 years while the rest of the market has floundered. Everything in real estate is cyclical, so it's probably time for the luxury market to rest for a while and let the lower and mid-range markets have their turn.

Sales in January were slightly below January 2014, but February more than made up for that and we saw an increase of almost 10% over February 2014. Also, the most encouraging development is the return of the entry level home buyer, and this can be seen in the places where demand is clearly outstripping supply. Specific examples include Mesa, Phoenix, El Mirage, Avondale, Glendale, Chandler, Youngtown, Tolleson and Tempe. All of these areas have a Contract Ratio over 90, qualifying them as "hot spots". Last year at this time only 2 ZIP codes - Youngtown and Mesa were higher than 90 across the entire valley.

Last month we commented that the first-time home buyer is critical to the next stage of the recovery, and it looks like we finally got what we have been waiting for. Now we have to hope that February was not a one-time blip and that the trend will continue through the spring.

Click here to read the full Cromford Report.