Greater Phoenix Residential Market: 2021 March Results

Why Are Sales Near Record Highs While Listings Near Record Lows?

Median Purchase Price Reaches $400,000

Median Monthly Rent Sets New Record

Results for Twenty-Six Cities

The information in this report was compiled from Arizona Regional Multiple Listings Services, Inc., data. The following results are for single-family resale homes in Greater Phoenix. Single-family resale homes are the most popular residential category in terms of the number of monthly sales. 

For the first time in the history of Greater Phoenix the median purchase price for a single-family resale home ended a month over $400,000. It was $407,000 in March. March’s median purchase price was $12,000 or 3% higher than February, $27,000 or 7% higher than January and $72,000 or 21% higher than March of 2020. March’s median purchase price was the tenth consecutive month it has increased. The median monthly rent for a single-family resale home in March 2021 was $1,950. This is a new record high. March’s median monthly rent was $55 or 3% higher than February and January of 2021 when both months were $1,895, and $255 or 15% higher than March 2020. See Chart One.   

March listings and sales. Monthly listings of single-family resale homes in March 2021 were 6,793 – the lowest number reported for March in 20 years, and 10% lower than March 2020. While March 2021 listings decreased year-over-year by 755, or 10%, sales in March 2021 increased 10% (6,740 homes sold, or 622 more). That’s the third-highest number ever for March. Also, March 2021 sales were 27% higher (or 1,437 more) than February 2021. See Table One.   

How can monthly sales be near record highs while monthly listings are near record lows? Too many buyers are chasing too few sellers. It is an extreme seller’s market. But this doesn’t explain why sales are so high when listings are so low. The answer is that almost every single-family resale listing will sell in this market. A sign supporting that is that more homes sold in March 2021 than there were sellers who listed homes in February 2021. Some 6,063 sellers listed their homes in February 2021, and there were 6,740 sales in March. This is not normal. In the past 20 years, there has not been a March with more sales than listings created in the preceding month. Of course, some March sales were represented by homes listed in January and December. But it shows that most active listings are being eaten up quickly. Another sign that we will continue to see an extreme seller’s market is that for every home sold in March 2021, there was one new listing – a one-to one-ratio. That is unusual and indicates that prices will continue to rise. In the preceding five years (2016 through 2020), the average ratio of March listings to sales is 1.3 listings to each sale. So buyers beware: Inventory will remain exceptionally tight. 

Agent days on market dropped like a rock in March. Agent Days on Market (ADOM) dropped to thirty-one days in March down seven days or eighteen percent from February and down ten days or twenty-four percent from January. In March 2020 ADOM was fifty days. I now measure estimated months of supply by days and not months. For prices from $200,000 to $450,000 the estimated days of supply is less than ten days. I have never seen it lower. If the market doesn’t slow down, we will soon be measuring estimated supply by minutes. See Table Two.   

Table Three has March 2021 single-family resale home results for twenty-six cities located in either Maricopa or Pinal Counties. It compares year-over-year, sales, new listings, and median purchase price and median monthly rents. Note: the blanks in the median monthly rent columns indicate no monthly rentals or a very small number of rentals.  

What does the above mentioned information mean for buyers? It means that the market to purchase a single-family resale home will remain exceedingly competitive. It signals that the median purchase price for a single-family resale home has not stopped going up. In April it will probably end the month around $410,000. But every buyer and every buyer’s agent should remember this: That as competitive as the market is, the number of monthly sales are also close to record highs – so never give up writing offers! Note: Starting soon will be a monthly call for real estate agents to go over trends and strategies for competing in today’s residential marketplace. To receive notification, email me at FWilcox@gcta.com 

The information in this report is deemed accurate but agents, buyers and sellers should verify any information contained in this report before buying or selling.

Note: Starting soon will be monthly call for real estate agents to go over trends and strategies for competing in today’s residential marketplace. To receive notification, email me at FWilcox@gcta.com