The market in Arizona is making home buyers nervous over the past month. Multiple offer situations and homes selling for more than list price have been feeling eerily similar to the previous housing bubble. Returning boomerang buyers, having already suffered a short sale or foreclosure during the recession, are especially sensitive to memories of the infamous 2005 “bubble” where multiple offers over list price were a common everyday occurrence. Flash sales, property sold within a day or less on the MLS, saw the highest volume last March since August 2013. However, a measure of 210 does not come remotely close to the 1,032 flash sales measured March 2005. There is a growing number of properties selling over list price as well. But again, 2017 only saw 16% of sales fit this category while April 2005 saw 37%. So while our real estate environment is indeed competitive for buyers right now, thankfully it doesn’t resemble the same level of insanity experienced during the 2005 bubble.
As a seller, it’s helpful to note that annual appreciation rates* have been consistently averaging close to 5% for nearly 2 years. Compare this to the two years between August 2003 and August 2005 where the annual appreciation rate rose from 5% to a ridiculous 45%. Between January and July 2005, unprecedented appreciation ranged between 4-7% PER MONTH compared to an average of 1% per month thus far in 2017. Current prices are the highest they’ve been since January 2008, over 9 years ago, and they’re comparable to April 2005, over 12 years ago. However at an average of $152 per square foot, sale prices would need to appreciate another 25% to compare to the highest peak achieved in May 2006. At the current rate, that could take another 4 years to reach.
If you’re ready to start looking for a home and want more details on the market in Arizona, or want to list your home, please contact me to get started! I am looking forward helping you find your Joy of Coming Home!
Commentary written by Tina Tamboer, Senior Real Estate Analyst with The Cromford Report ©2017 Cromford Associates LLC and Tamboer Consulting LLC *Comparing the average sales price per square foot for the most recent 12-month period to the prior 12-month period