As we begin the year, the craziness from the latter half of 2020 is continuing in full force. In fact, home demand has increased further, supply has dwindled even more, and we are still seeing lots of upward pressure.
As of this writing, there are only 27 homes available for sale in McCormick Ranch. This includes condos, townhomes, patio homes, and single family. Spring time numbers have recently been closer to 80-100 homes so this is extremely low. We had 48 sales in January so this gives us only about 2 weeks of inventory. This will continue to put extra pressure on homes prices for the near future unless we see a lot of sellers willing to move.
What's driving the increases?
Low interest rates are continuing. Home prices are often a function of the result mortgage payment. When rates go down, affordability goes up.
Phoenix is the fastest growing metropolitan area in the country. We have many new residents moving here from California, the Midwest, and back East. Many of these places have homes more expensive than ours. These buyers have the funds and jobs to easily afford our homes.
Lack of inventory. Many of us just do not have the desire to move and deal with people in our homes during the pandemic. Plus, where would you move to? It can be difficult to find a home once you sell. But, the number of sales over the past 6 months has been higher than the prior year. Anything that is listed is just gobbled up quickly.
It shouldn't come as a surprise that prices have continued to rise. Every single category is at their all time highs. Single family homes are up an amazing 22.6% year over year. Condos and patio homes are up around 12 and 11%, respectively. Townhomes are up substantially more, but this is sometimes due to being listed incorrectly as they can be patio homes or condos.
In line with prices, price per square foot is at an all time high as well. We're seeing very similar gains and numbers. As a reminder, price per square foot is worthless as a measure to value an individual home but very useful when looking at the market as a whole.
So, where do we go from here? It is looking like just up for the time being. We would have to see a major catalyst to change things short term. Longer term, rising interest rates or a large economic change would be the biggest factors that could change this direction. Well, that or everyone decides all at once that Scottsdale is just too hot during the summer. But that hasn't phased us yet!
For a seller, expect to be able to price it aggressively and still have it sell over a week. For a buyer, be prepared to pull all guns out and bid your best once you find the right home.
As always, please subscribe to receive these updates directly to your inbox.
Yours in McCormick Ranch real estate,
Randy
We are now recovering from the turkey coma and full swing into Holiday season. Lights are going up all around McCormick Ranch, the air is getting a little crisper yet the days are still beautiful. We are in the prime season for what makes Arizona so great.
As we examine the real estate market through Phoenix and McCormick Ranch in the 4th quarter, we usually see a bit of a seasonal slow down. It isn't uncommon to only have 30-35 sales a month as everyone focuses on family celebrations instead of family moving. Yet, as we have seen throughout the year, this season is anything but normal. There were 52 this past November putting us around a 50% increase in pure sales. You can see the regular dips in the second half of the year in the chart below.
Sales prices continue to stay strong. In fact, the average single family home has now sold for $130,000 than just 12 months ago. That is an incredibly impressive amount and represents a 19.9% gain year over year. Condos are up 15.2%, townhomes are up 25%, and patio homes just 6.1%.
Price per square foot matches the pure home price gains. We're seeing increases between 8 and 20% year over year.
So, what's next? Looking forward my guess is that we will see much of the same at least through the Spring of 2021. As of this writing, there are only 40 (just 40!!!) homes available in all of McCormick Ranch. With our 52 sales in November, these 40 homes will only last around 3 weeks. This is the absolutely lowest number of active homes I have ever seen and is surely going to create additional bidding wars.
That being said, we usually see extra homes come on the market in mid-January but there is a lot of pent up demand.
Speaking of demand, it seems to be never ending right now. Mortgage rates are ticking lower almost every month or two and mortgage applications are increasing. The average rate is now 2.92%, according to the article. This gives a lot of extra buying power and helps drive up prices. Plus, with the movement of Californian, mid-Westerners, and those back east to here, Maricopa has become the fastest growing county in the country. Our prices are lower than many of those states creating additional local demand.
As such, assuming none of the major factors (like rates) do not change, we should continue to see a minimum of another 6 months of strong buying.
Please subscribe to receive these updates directly to your inbox. Have a wonderful Holiday Season!
-Randy
As we start November, there is a little more uncertainty in the air normal. Between the election, rising Covid-19 numbers, and a jittery stock market, certain aspects of our lives seems to be a little shaky once again. However, real estate is still being our rock and holding up strong.
McCormick Ranch has especially been on a tear and that has continued throughout the last few months.
Let's start with price per square foot. The average for single family is now well over $300/square foot. Please keep in mind that this is a rolling 6 month average to help smooth the data. Thus, the last few months are even slightly higher than this. This is an incredible year over year increase of 17.8%.
Condos, townhomes, and patio homes are also at or very near their annual highs.
Pure sales prices are also climbing although they do appear to have stabilized. However, I expect that this will trend higher over the next few months. At the start of the month, there were 8 homes over $1,000,000 that were under contract. And, there were four that closed. We're seeing a lot of demand for premium homes that are fully renovated from top to bottom.
Single family sales prices are also up a whopping 16.04% year over year.
Lastly, let's take a look at the number of monthly sales. We saw a huge bump at the end of the summer and a little bit of a drop throughout the fall. This is fairly normal as sales do tend to taper off in the second half of the year. However, this year is anything but normal. The bigger concern for many buyers is the pure lack of available homes. Some buyers are now getting discouraged and holding off. Or, they are waiting for that perfect home to come up.
Looking forward, I am not expecting any major changes over the next 3-6 months. Our inventory numbers are incredibly low with just 57 homes active and available all throughout McCormick Ranch. There are 68 pending sales. Using these pending sales (and an average escrow of around 5 weeks), these sales would just last about a month. Unless we see a major increase in inventory or a huge rise in interest rates (the other cause of such high demand) then this will continue to be a strong seller's market.
As always, please subscribe to receive these updates delivered directly to your inbox.
Yours in real estate,
Randy
