New Listings Are the Lowest Seen in Over 22 Years: Demand 22% Below Normal
As always, we strive to inform our clients with timely market data. Here are the latest stats from Tina Tamboer, Senior Analyst with the Cromford Report.
SUPPLY = 51% below normal, and dropping
* our active supply is down 37% from this week last year
DEMAND = 22% below normal, and dropping as seasonally normal
NEW LISTINGS = the lowest number we’ve seen in over 22 years
ACCEPTED CONTRACTS = the lowest weekly counts we’ve ever seen – about 1,500/week
DAYS ON MARKET = 20; historically normal and staying consistent
* Down from 56 DOM in January
MEDIAN SALES PRICE = $439,000 – down 4.6% from July 2022
ANNUAL MEDIAN SALES PRICE PER SQUARE FOOT APPRECIATION= Down 2.5% YOY but should start to show positive in August or September
CONCESSIONS = 41% of all sales in July had seller paid concessions; median concession is $8,200
SALES PRICE VS. LIST PRICE RATIO = 98.3% of list price
* 22% of sales in July closed over list price
SUMMARY
We are in a stable Sellers Market
Rental supply is continuing to rise; highest number since 2018
FHA contracts are up! In July, they represented 22% of all sales (this is up from 10% this time last year)
Investors and iBuyers are pulling out of the market. Investor purchases were 12% of all purchases in July (down from 21% in Q2 2022)
Cash purchases have declined. In July, they represented 19% of all sales (down from 33% in June 2022)
What’s reasonable to expect in the coming weeks/months?
Leading metrics in Greater Phoenix do not support continued downward pressure on price for most cities
Year-Over-Year appreciation to hit positive in August or September
Supply and demand gap is still pretty big – because of this gap we should still see prices continue to rise
Some badly informed observers still think there is a bubble popping situation ahead, but they completely misunderstand the situation. For prices to fall, we have to have an excess supply compared to demand. Even though demand is very weak, supply actually got 2.6% smaller over the last month. There is very low delinquency in residential real estate lending right now, so it takes a ridiculous leap of great imagination to believe that foreclosures are going to have any significant effect on supply in the foreseeable future.
Please feel free to reach out with any questions. The Raegen Johnson Group understands that the current market is challenging and there is uncertainty regarding interest rates. We strive to keep you informed so you can make the best real estate decisions for you. Although interest rates are high, it is still a good time to buy! We anticipate once interest rates come down a bit, the market could quickly go back to being a frenzy since many buyers as well as sellers are waiting for this to happen to make their
move.
