Happy New Year! I hope you are having a wonderful start to 2022 and have many great things in store.
Whenever we start a new year, we can look back and see what happened. In early 2021, my predictions were that the market would continue to go up. We only had around 25-30 homes available for sale in early 2021 and demand was beginning to creep up.
Well, at the start of 2022 we only have 14 homes available. 14(!). This includes single family, town homes, and condos. I doubt there was ever a time that inventory was this low in the history of McCormick Ranch. Homeowners are staying put and anything that is listed is sold almost immediately.
Year over year, single family homes are up around 27%. Our two year average is around 23 or 24%. This is mind boggling. With what is currently listed, selling, and going under contract, it looks like January 2022 will keep this trend moving higher.
Condos are up around 20% per year over the prior two years and townhomes/patio homes are close to this range, as well. There is a lot of overlap in these two styles so they are averaging out relatively close.
As expected, price per square foot has risen in a similar manner.
When looking at monthly sales over the prior 5 years, there is a definite bump that occurs every spring. This is our busy season and we usually see 50-70 homes sell each month from February through May. I do expect more homes to be listed so we should continue to see this.
So, where do we go from here? I think the next 6 months (at least!) will be similar to the past few years. There is so much demand that this doesn't yet seem to want to falter.
However, interest rates are starting to rise. Certain types of loans such as second home and high balance loans are also becoming substantially more expensive. This has the chance to lessen demand. If regular owner occupied rates end up at 4.5-5% or more, we could see home prices finally flatten.
Only time will tell!
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Yours in McCormick Ranch Real Estate,
Randy Arriola
As we round out the year, all we can do is look back and think about how this was one for the history books. 2020 was a year of uncertainty, 2021 was a year of competition amongst buyers. Almost everyone was caught off guard by the sheer demand that buyers had even starting in January. It hasn't slowed down, yet. Let's take a closer look:
Over the last 12 months, the average sales price for a single family home has increased approximately 24% from $808,000 to $1,003,000. Yes, the average home in McCormick Ranch is now over one million dollars. A million used to be a fully remodeled lake front home just a few years ago. Now, the average home will sell for this (and in an average of 29 quick days!). This is simply incredible.
Condos, townhomes, and patio homes are also all up by a very strong market. Condos are up 26% and townhomes/patios are closer to the 28% mark. All property owners are still very pretty, whether you have owned your home for 6 months or 36 years.
It shouldn't come as a surprise that price per square foot has also continued to increase at a break neck pace. Condos and single family have continually increased pretty much every single month. Patio homes and townhomes had a lull at the end of 2020 but have risen steadily since then.
The number of sales has remained relatively consistent year over year. We see a peak in the spring and somewhat lower numbers in the fall.
The biggest question at this point is always going to be, "What's next?" I think 2022 will see an extremely busy spring with big gains once again.
Let's dive into the chart above. These are two of the largest indicators of what is going to happy in the future, in my opinion. First is the yellow line which are the number of active homes. Back in 2017 through 2019, we often had 100-130 homes available at any given time throughout McCormick Ranch. This let buyers choose from many options and not have to instantly rush into a home. At the start of the month, there were just 16. 16 homes between single family, condos, townhomes, and patio homes. That is not a lot to choose from. This tends to be the slower time of the year to list but this is pretty incredible and is the lowest amount I've ever seen.
As we track the months of inventory, it similarly has tracked on the historically low side. We calculate the months of inventory by dividing the number of sales in the prior month by the number of homes available. Due to the low inventory and strong number of sales, we have had less than 1 month of inventory for the majority of the year. And, it has stayed low for the last few months. With so little supply and still lots of demand, I am expecting another crazy spring.
Have a happy Holiday season!
Yours in McCormick Ranch real estate,
Randy Arriola
The weather has finally turned and we can enjoy more time outside! This is one of my favorite times of the year as we still have a lot of daylight and can be outside almost all day.
In retrospect, throughout the Phoenix area and McCormick Ranch, we saw a little bit of a lull in July and August. In mid September, though, we have seen another small surge in real estate activity. Rates tempered down and demand picked up once again.
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Please keep in mind that the charts below are a rolling 6 month average. I've done this to even out some of the highs and lows of each month as our data set is reasonably low. If we look at the raw data, the last three months have seen an average sales price above $1,000,000. This is pretty incredible for our market. Townhomes, condos, and patio homes are also increasing very quickly.
We had 41 sales in McCormick Ranch proper last month. You can see that this is a bit higher than the low 30s from the prior month. More importantly, we only have 39 active listings to start October. And, there are 50 homes under contract. This means we have less than a month of inventory. There are still no signs that this market is really turning. We are in a complete sellers market. We have had less than a month of inventory since June 2020, sans a couple random months with about 5 weeks worth.
So where do we go from here? My expectation is that October will continue to stay fairly busy. But, in November and December we should see a seasonal lull. It's the holiday season which means many do not want to move. Come early January, we should see the market get extremely busy once again.
Yours in real estate,
Randy
