Despite this current pandemic, many homes are going under contract in 8 days or less when priced under $400K.
Greater Phoenix, with a population of approximately 4.8 million people has just 1.4 million single family homes, condos and townhomes in total inventory. Only 8,759 of these units were available for sale as of July 8th through the Arizona Regional MLS. If that number doesn't make your jaw drop, then this might: only 1,023 are single family homes under $300K and that number is diminishing every day.
Last month saw a surge of buyer activity, but it was not met with an equivalent surge of new listings. When compared to last year, new listings were down 7.8% while contracts in escrow soared 24% higher. For buyers under $300K however, new listings were down 22% in June compared to last year and are down 38% so far in July. This is causing an extreme amount of buyer competition in this price range.
When buyers extend their search over $300K, then new home construction starts supplementing inventory and providing some much needed alternatives. The top 3 cities for single family home permits are Phoenix, Mesa and Buckeye with notable spikes in building permits issues in Surprise, Maricopa and Queen Creek. The majority of new homes are selling between $300K - $500K, however buyers looking for brand new single family homes under that price point still have some options. The best place to start a search if looking under $300K is in Pinal County or Buckeye with average size homes being 1,800 - 2,000 square feet.
Conversely, new listings over $500K saw a spike last month, up 20% compared to last year. In June, 1,596 new listings came on the market and 2,046 were accepted in the $500K and above price range.
Brace yourselves! Half of the sellers accepting contracts under $400K in the first week of June were on the market for 8 days or less prior to contract acceptance. Sellers accepting contracts between $400K - $600K were on the market an average of 14 days while contracts between $600K - $1M were on the market an average of 41 days. Long story short is, IT IS A GREAT TIME TO BE A SELLER!
While 28% of all sales i July so far have closed over asking price, that percentage peaks at 41% for those between $200K - $300K. Top cities for closings over asking price are Tolleson, Avondale, Glendale, Gilbert, and Youngtown. Gilbert is the only city in that list with a median sale price over $300K.
Seller-assisted closing costs remain popular and were involved in 23% of all sales in the first week of July. That percentage increases to 33% on transactions closed between $150K - $300K. Top areas where 50% - 60% of sales involved seller accepted closing cost assistance were Youngtown, West Phoenix, Aguila, Glendale, and Tolleson.
This supports the theory that sellers receiving offers over asking price in the West Valley and other affordable areas are still open to accepting closing cost assistance if a contract meets their most important needs.
~Commentary and Infographic courtesy of Cromford & Associates LLC