Monthly Market Update February 2020

Monthly Market Update February 2020

Here are the basics – the ARMLS numbers for February 1, 2020 compared with February 1, 2019 for all areas & types:

• Active Listings (excluding UCB & CCBS): 11,974 versus 19,040 last year – down 35.1% from last year and down 1.4% from 12,141 last month.
• Active Listings (including UCB & CCBS): 16,015 versus 22,655 last year – down 29.2% from last year but up 6.8% compared with 15,018 last month.
• Pending Listings: 5,969 versus 5,012 last year – up 19.1% from last year and up 28.0% from 4,662 last month.
• Under Contract Listings (including Pending, CCBS & UCB): 10,030 versus 8,627 last year – up 16.3% from last year and up 33.0% from 7,539 last month.
• Monthly Sales: 6,403 versus 5,467 last year – up 17.1% from last year but down 17.8% from 7,789 last month.
• Monthly Average Sales Price per Sq. Ft.: $182.20 versus $167.79 last year – up 8.6% from last year and up 1.3% from $179.85 last month.
• Monthly Median Sales Price: $289,900 versus $262,000 last year – up 10.6% from last year and up 0.1% from $289,500 last month.

Interpreting the Numbers:

In last month’s report, its was suggested that buyers needed to hope for a big surge in new listings. Not only did they not get anything close to a big surge, they didn’t even get a tiny up-tick. In fact, unexpectedly, there are far fewer new listings than normal at this point in the year. This lack of supply was described as shocking at the start of 2020. It appears that was an understatement at this point! It is almost (but not quite) unheard of to see supply drop between January 1 and February 1, but active listings without a contract are down 1.4% for the month. They are down a colossal 35% compared to a year ago!

Meanwhile, demand has been picking up! Monthly sales are up 17% compared with last year and listings under contract are up 16%. Given that there are so few homes to buy, this is impressive. Economics 101 teaches us that lower supply and higher demand is the perfect recipe for higher prices. So far, the reaction of pricing has been muted. However, no one should expect it to stay that way. The spring selling season has just started and, by the time we get to June, a significant upward adjustment in pricing is likely. In addition, mortgages are becoming easier to qualify for in many different ways, so demand is likely to increase even more so; however, there is no sign of more supply coming along to satisfy it. In this situation the market is likely to become both frenzied and frustrating for many people.

One way to make sure you stay sane in this crazy market is to team up with a seasoned professional! Our agents know the market! They can help you get the most for your home, and because they do their research and regularly network within the community, they are well equipped to help you find a new place to call home. If you are interested in knowing the current value of your home, or if you are looking for an agent who really knows the inventory and can help you find a home in the Phoenix Metro area, contact us at 480-425-9300 or info@azarchitecture.com. Despite these crazy market conditions, we are confident we can help you!