Market Update: Is Now A Good Time To Buy A Home? Purchase Price Sails to A New Height | October 2019 Sales Results
December 2, 2019
V.P. Business Development & Real Estate Analyst, Grand Canyon Title Agency
October 2019 sales of single-family resales in Maricopa County (Greater Phoenix) were 5,589. Sales this October were 353 or seven percent greater than October of 2018 when there were 5,236 sales. Sales in October 2019 represented the seventh consecutive month in year-over-year sales. Year- over-year sales were down the first three months of 2019 compared to 2018. See Chart one. Also in Chart one, sales in January 2018 and 2019 was the month with the least number of sales, and sales in May 2018 and 2019 was the month with the most sales.
New monthly listings of single-family resales in October 2019 were breakeven compared to October 2018. Both months had about 7,000 new monthly listings. The 7,007 new monthly listings in October 2019 were 457 or seven percent higher than September 2019 when there were 6,550 new monthly listings. This means more choices for homebuyers. And that is a good thing.
Median Purchase Price Sails to a New Height
The median purchase price of a single-family resale in Maricopa County reached a new height in October 2019. It hit $315,000. The October 2019 purchase price of $315,000 was $25,000 or nine percent higher than October 2018. The purchase price in January 2019 was also $290,000. See chart two.
Is Now A Good Time to Buy a Home?
When is the best time of the year for a homebuyer to buy? It all depends on a homebuyer’s situation. If however, the primary concern is paying the lowest purchase price, then right now may be the best time to kick-in a homebuyer campaign. For each of the years shown in Chart two, 2015 through 2018, the month with the lowest median purchase price is in January. For each of these years, the median purchase was between five to nine percent higher in December than the preceding January. By the end of 2019, we will see a repeat of this pattern. So, if the goal is to pay the lowest purchase price, then close escrow in January, or as near to January as possible. To close escrow in January a homebuyer should start looking today and get under contract.
Sales Comparison: October 2018 to October 2019 by Price Range
Overall, October 2019 sales of single-family resales in Maricopa County were 353 or seven percent higher than in October 2018. However, sales under
$250,000 in October 2019 was 462 or 26 percent less than October 2018. Scoring big in October 2019 were sales between $250,000 and $999,999. There were 815 or 24 percent more sales from $250,000 to $999,999 this October over last October. Sales from $1,000,000 to $1,499,999 were breakeven at seven-five each in October 2018 and 2019. See table one.
Estimated Months of Supply by Price Range
As of November 3, the estimated months of supply for listings under $250,000 is less than one month. For listings from $250,000 to $449,999, it is under two months. For listings from $450,000 to $899,999 estimated months of supply is between two and four months. See table two.
Today may be a good time of the year for homebuyers to start the home buying process. Based on information for the last few years, we are moving into the season when purchase prices are at their lowest point of the year. Of course this information is based on sales of all single-family resales in Maricopa County. Any particular area may differ as to seasonal purchase prices.
If mortgage rates continue to be as low in 2020 as they have been the last half of 2019, which is likely, this will mean many buyers competing amongst each other for new listing inventory. So expect in 2020 a lot of competition for homes in the most popular price ranges. If this is the case, then the median purchase price for a single-family resale may very well reach $330,000 sometime in the second or third quarter of 2020. All in all, 2020 should be a very good, but competitive year, for residential real estate agents.
The data for the charts and tables in this report was compiled from the Arizona Regional Multiple Listing Services, Inc. (ARMLS).