May 2016

FOR BUYERS:

May is often the last month of “buyer season” before the summer slowdown.  In anticipation of hotter temperatures, graduations and upcoming summer vacations, many home buyers would prefer to get their contracts into escrow and closed before the end of June.  As a result, there are many areas of the valley where there are currently more properties in escrow than active for sale.   Not surprisingly, those areas are concentrated where the average sale price is under $250,000 in parts of the Southeast Valley (such as North Tempe, West Mesa, North Chandler and North Gilbert), South Phoenix, and most of the West Valley.  This is temporary. Buyers can expect relief from competing offers in the summer months if they choose to brave the higher temperatures.

FOR SELLERS:

Overall sales have been following 2015 pretty closely thus far.  April was down less than 1% from April last year, but year-to-date sales are up 2.5% as of week 19.  The main difference is in the activity by price range.  Sales under $175,000 have been declining year-over-year for the past 9 months with April 2016 down 18.4% from April 2015.  This is not due to low demand, but low supply of homes available for sale.  April sales between $175,000 and $600,000 are up 15% year-over-year and down 9.3% over $600,000.  The big difference between these price points is the level of supply.  It’s chronically low in the bottom price ranges and too high at the top, causing vastly different experiences for sellers.  Properties selling under $175,000 are experiencing annual appreciation around 10% since the beginning of 2016.  Middle range properties are seeing around 3-5% annual appreciation, and the high end properties over $500,000 are experiencing flat appreciation rates at best with some price ranges at the very top seeing negative annual appreciation.