McCormick Ranch Sales Update: May 2024

Stability is the name of the game right now. March started the number with 81 active listings. April followed it up with 81 active listings. What did we have on May 1st? 81 active listings.

Inventory has been wavering a bit day to day but we are seeing a pretty stable market right now. Let's start by looking at the number of sales.

Much like the rest of the Phoenix market, McCormick Ranch is having an unusually low number of sales. From January through April, we are around 25% lower than 2023 and 40% lower than 2022 sales. Yet, the limited number of homes on the market has kept prices stable. Sellers are still not motivated to leave their low interest rates unless they have an incredibly good reason to do so.

Prices show a little bit of a dip but my feeling is that this due to our smaller sample size. The most expensive home that sole in McCormick Ranch in April closed at $1,650,000. We often see sales in the $1.7-$2.2 range so the data was slightly skewed. Looking at what is currently under contract, we should see this rise the next month. As of now, there are 5 homes under contract with list prices above $1,750,000.

Condos, patio homes, and townhomes were all flat to rising a hair as is usual this time of year.

Price per square foot did drop for single family, townhome, and condo. But, the trend overall has been upward over the past 12 months. Single family and condo price per square foot are up 6% over the prior year. Townhome and patio home are more subdued at just 1.5% higher.

So what now? Over the past month we have had a slew of economic data released. On Wednesday, April 10th, the inflation report showed that inflation was annualized at 3.5% instead of 3.4%. This, among other data, has been enough to raise average 30 year rates from 6.82% from 7.22% per Freddie Mac. Yet, Jerome Powell, head of the Federal Reserve just stated that they are not expecting to raise rates further, giving the bond market (and thus interest rates) a sigh of relief.

We are still in a gray area. Inflation is sticking around longer than anticipated. The question is now how long will rates stay high? Many economists went from expecting up to 7 Fed rate reductions for the year, then to 3, and now to possibly just 1.

This means that demand will still likely be tempered and the number of new listings will also remain low. We are also nearing the end of our busy season that runs from mid-January through June. I'm expecting a fairly flat market for the remainder of the year barring some major economic shift in either direction.

Yours in McCormick Ranch Real Estate,

Randy Arriola