2020 Remarkable Year For Real Estate In Phoenix Market exceeding all expectations! Despite all the challenges we faced the year was transformed into the most successful sales year in ARMLS history. (Arizona Regional Multiple Listing Service)
“A strong first quarter was followed with a 27.1% year-over-year drop in sales volume in April and a 33.7% drop in May. Historically, April and May are in the middle of our home buying/selling season. In a time when sales normally flourish, we were floundering. With the June numbers, 2020 was back on top and back on track.
Throughout the final half of the year sales soared, with 5 of the 6 final months of the year reporting the highest sales volume in ARMLS history.
With the ARMLS books closed for the year, 2020 went down as the year with the 2nd highest number of homes sold, with just 2,471 fewer sales than 2005
Before we leave 2020, let us take one final look at the year-over-year price metrics for December. ..the median sales price as well as the average sales price hit historic highs, both with significant price gains. In December, the median sales price rose to $333,000 and the average sales price hit $431,528, accounting for year-over-year increases of 14.9% and 20.0% respectively.
- Keep in mind these are averages for all homes in the system. Real estate has always been very local – basically your neighborhood. One area might have only gone up only 6-7% and another over 20%. A professional real estate agent can help you discover the value of your home in today’s market.
What’s ahead for 2021
As we move into 2021, there is no more important metric than supply and how supply relates to demand. We begin 2021 with above normal demand and extremely low supply. STAT reported 11,602 active listing… entering 2020. As of January 2021, we currently have 5,969: a 48.6% decline.
We began 2020 with normal demand while seeing a 31% decline in active listings and we know how it turned out. What will a 48.6% decline coupled with above normal demand mean? None better than Michael Orr to explain:
“Buyers cannot be blamed if they’re in despair about the lack of supply. We have less than half the number of active listings without a contract than we had a year ago. This time last year we described the lack of supply as shocking, so what do we call the current situation?
We saw more new listings arrive during 2020 than during 2019, but only 1.4% more. The annual sales rate increased by 6% so the extra supply proved thoroughly inadequate in the face of demand. Prices have accelerated due to the huge imbalance between supply and demand, yet we have only seen part of that reaction. Sales prices are a trailing indicator and lag the leading indicators by up to 15 months. We can therefore expect to see prices move even higher during the next 12 to 15 months with appreciation rates possibly rising over 20%.” ARMLS Stat Data 2020
2021 Promises to be a challenging year for especially for real estate buyers!
Until we see an increase in inventory buying a home will continue to be very competitive. If you are thinking of buying a home you need to be exceptionally well prepared. Much of your shopping will be done online and viewing fewer homes in person. You will need to make a decision on whether to make an offer quickly. If you would like help with the home buying process please reach out to me.
The Fed has committed to keeping interest rates low for some time. Mortgage rates hit all time lows roughly 15+ times in the last 12 months allowing buyers to purchase more expensive homes. Once rates rise many buyers will be looking to purchase less home or be priced out of the market completely.
Home owners and investors should see values rise and their equity position increase. Investors also saw rents rise substantially in 2020. If you are thinking of selling now might be a great time with less competition the time to sell your home is shortened and you may even receive multiple offers. For the immediate future the Seller’s Market should continue.
Eventually, market conditions will change. Real estate goes through cycles of a Seller’s Market to a Balanced Market to a Buyer’s Market. Depending on which expert you agree with Seller’s Market has lower inventory and a shorter selling time of 0-3 months. A Balanced Market between buyer and seller inventory 3-6 months to sell and a Buyer’s Market 6+ months to sell.
Homes in the Valley under $500,000 will tend to sell more quickly than higher priced homes because more buyers can afford to purchase them.
Phoenix has been in the top 10 places to move to from out of state for quite some time. For example, our prices are more reasonable than high costs states like California.
If you are thinking of selling your home and purchasing another there are multiple strategies for accomplishing this. I would be happy to talk to you regarding developing a way to reach your goals.
Mortgage Loan Limits Increase for 2021
The New Normal: A Strong Housing Market Expected to Continue into 2021