Old Housing Stock Creates Opportunities for Remodels, Fix & Flips; Results for January Sales, New Listings and Median Purchase Price
February 26, 2019
Grand Canyon Title Agency
The Maricopa County median purchase price for a previously owned single-family home in January 2019 was $290,000. This was $16,250 or six percent higher than January 2018. In the previous five years, the month of January has always been the month with the lowest median purchase price of the year, except in 2010, when it was tied with February.
Sales, New Listings, Median Purchase Price for Fifteen Cities
Table one compares sales, new listings and median purchase price for previously owned single family homes for fifteen cities located in either Maricopa County or Pinal County. The table compares the results for January 2019 to January 2018.
Five cities had sales that were breakeven year-over-year, while sales were down in ten of the cities. The breakeven cities were Goodyear, Casa Grande, El Mirage, Fountain Hills and Apache Junction. New listings were up year-over-year in six of the cities. The median purchase price was up in fourteen of the cities year-over-year. The only city showing a decline was Chandler.
Sales by Year Built Shows Old Housing Stock
Table two shows the number of single-family sales in 2018 by the year the home was built. The table shows an old housing stock. Fifty-six percent or 38,020 of single family homes listed and sold through the Arizona Regional Multiple Listing Services, Inc. was built before the year 2000. Twenty-one percent or 14,100 of these homes were built from 1990 to 1999.
This older housing stock creates an opportunity for homes to be remodeled, fixed, and flipped.
A secondary effect of the great real estate recession was the lack of new home building in the years 2010 through 2015, while at the same time the population grew. According to the U.S. Census Bureau, the population in Maricopa County increased by 259,283 people from 2010 to 2015. Of the 68,109 sales in 2018 only six percent or 4,117 of sales were for homes built from 2010 through 2015.
Good News: Job Report, Thirty Year Fixed Mortgage Rate Goes Down, Increased Conforming and FHA Loan Limits
On February 1, there was a blockbuster jobs report. The report showed jobs in the United States increased by 304,000 in January. Many economists predicted there would be an increase of only 172,000 jobs in January.
A pleasant surprise for home buyers is that according to Freddie Mac, on January 31 the average thirty year fixed mortgage rate was 4.46 percent. This is almost a half percent less than when it was 4.94 percent on November 15.
Loan ceilings for conventional and FHA loans in Maricopa County went up in 2019. The new conventional loan ceiling in 2019 is $484,350 from $453,100 in 2018. FHA increased their loan ceiling in 2019 to $314,827 from $294,515 in 2018.