Greater Phoenix Residential Market
October 1, 2021
Big Monthly Purchase Price Gains Come to A Halt.
Purchase Price Goes Flat After Fourteen Consecutive Record Months But Rents Increase
U.S. Census Bureau Population Information for Yavapai and Pima Counties
August Results for Single-Family Resale Homes in Maricopa County
MEDIAN Purchase Price. It started in June 2020. This was the first month of fourteen consecutive months of median purchase prices increases for single-family resale homes in Maricopa County (Greater Phoenix). With each subsequent month, the median purchase price reached a new high. These monthly increases have been greater in 2021 than 2020. From June 2020 to December 2020 the average monthly increase in the median purchase price was $6,000. From January 2021 to July 2021, the average monthly increase in the median purchase price was $11,666. These large monthly increases have come to a halt in August. There was not an increase from July 2021 to August 2021. The median purchase price for a single-family resale home was $450,000 in both August and July. However, August’s median purchase price was $70,000 or 18% higher than January 2021 and $93,250 or 26% higher than August 2020. See Chart One. WAS the August Median Purchase Price Flat in All Cities? No. Table One compares the median purchase price from July to August for twenty-six cities that are in either Maricopa or Pinal Counties. Eleven of the twenty-six cities had higher median purchase prices in August. They were Apache Junction, Buckeye, Cave Creek, El Mirage, Fountain Hills, Goodyear, Maricopa, Mesa, Scottsdale, Surprise and Tempe. Twelve cities had decreases in August and two cities were flat. SALES. The number of sales has declined since June. Sales in both July and August were around 6,000. Down from approximately 6,700 in previous months. See Table Two. Agent days on market were 26 days in August, down from 25 in July. NEW monthly Listings & Estimated Months of Supply. August 2021 new monthly listings were 6,917. This was 515 or 7% less than July and 551 or 7% less than August 2020. Overall inventory is still very low. On September 7, in ARMLS there were only 4,313 active listings for single-family resale homes in Greater Phoenix. This is extremely low. And on September 7, there were only 51 active listings under $250,000. For months now, on any given day, the number of homes listed under $250,000 has been around 50. This is out of a market that has approximately 1.3 million single-family resale homes. The estimated months of supply for listings under $450,000 is about two weeks. For listings from $450,000 to $1,000,000 about a month of supply. For listings from $1,000,000 to $2,000,000, a supply of one and a half months. RENTS for single-family resale homes increased in August. Once again reaching a high never seen in Greater Phoenix. Median monthly rent was $2,295 in August. This is $70 or 3.1% higher than July 2021 and $400 or 21.1% higher than August 2020 when it was $1,895. See Chart One.
U.S. Census Bureau Population Numbers for Pima and Yavapai Counties
There are eleven megaregions in the United States. Megaregions are defined as highly populated areas with growing populations and lots of economic activity and growth. The Arizona Sun Corridor is considered a megaregion. It consists of Maricopa, Pinal, Pima, Yavapai, Santa Cruz, and Cochise counties. Today we will review population growth in two of these Arizona Sun Corridor counties: Pima and Yavapai counties. The data was compiled from the U.S. Census Bureau. The two main categories the U.S. Census Bureau uses for population change within a county are natural change and net migration. Natural change counts the number of babies born and counts the number of deaths. Net migration counts the number international and domestic migration to and from an area. Below are population tables for Yavapai and Pima counties. In the two tables, a year represents the period from July 1 to July 1. For example, Table Two for Yavapai County shows under the column 2020 and for the category Increase in Population the number 4,164. This number represents the population increase in Yavapai County from July 1, 2019 to July 1, 2020. In 2020, Yavapai County’s population increase was its highest in the last ten years. Yavapai County’s year-over-year population percentage growth was 1.8%. This made Yavapai County the third fastest growing county out of Arizona’s fifteen counties. Only Pinal and Maricopa counties had higher percentage growth. 100% of Yavapai County’s population increase in 2020 came from positive net migration because they had negative natural change. In fact, every year for the last ten years Yavapai County’s deaths outnumbered births.
Pima County’s 2020’s increase in population of 11,914 was the highest for Pima County in the last ten years and third highest amongst all Arizona counties, only behind Maricopa and Pinal Counties. In 2020, 100% of the population increase in Pima County came from positive net migration. 2020 was the first year in the last ten years that Pima County had negative natural change. Table Three shows that the number of births has been declining over the last ten years while the number of deaths has increased. Note: This information on population growth is part of a series I am working on titled the Great Population Migration to Arizona cities.
Conclusion and Looking Ahead
I expect the overall median purchase price for a single-family resale home in Maricopa County to finish in September around $450,000. This is where it has been for the last two months. Even though the overall August median purchase price ran into a wall, there will still be prices increases in the most desired areas, but most likely at a slower pace. Some area may have slight price decreases. While sales have slowed, listings have slowed. This very well may just be seasonal. It is still a very strong seller’s market. First time homebuyers will still have many challenges due to the low number of affordable homes, but first-time homebuyers, don’t give up! Expect migration to Arizona cities to be at least as good last year, if not better in 2021.