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Clear Title of Arizona is pleased to provide its clients with the Clear Connections Monthly Market Update. This report will provide you with the latest real estate trends.
Our business is built around the concept of educating and providing the personal service that Real Estate Agents and Lenders have come to depend upon. We want to provide accurate data to our clients, associates and friends. It is intended to keep you informed on critical market trends that affect our businesses.

SINGLE FAMILY HOME

In January 2017, single family home sales increased year over year in three major sectors, with new homes gaining market share once again:

  • New Homes (up 39%)
  • Normal re-sales (up 19%)
  • Investor flips (up 28%)

Because of lower distress levels, single family home sales decreased year over year in the remaining sectors:

  • GSE – Fannie Mae, Freddie Mac, etc. (down 23%)
  • Bank owned homes (down 30%)
  • HUD Sales (down 68%)
  • Third party purchases at trustee sales (down 21%)
  • Short sales / pre-foreclosures (down 18%)
  • Short sales / pre-foreclosures (down 19%)

Due to rising prices, the change in total dollars spent on homes was more favorable than the change in the unit count.

  • Total dollars spent on single family homes rose by 16% over February 2016.
  • Total dollars spent on townhouses & condos rose by 44% over February 2016.

During February, average single family pricing edged down slightly, reading $295,553, down from $296,062 last month but up from $284,374 in February 2016. Average new single family home prices during February were 3.3% higher than last year while the average new single family home size has declined by 2.9% over the past 12 months.

MEDIAN SALES PRICE

Median Sales Price

The median sales price rose 6.8% from $229,500 in February 2016 to $245,208 in February 2017.

NEW HOME SALES

February was yet another strong month for new home closings. Newly-built single family homes saw 1,115 closings in February, up 17% from 951 in February 2016. The total dollar value of single family new homes closed in February was up 21% from $340 million in 2016 to $412 million in 2017.
The average sq. ft. of a new single family home in February was 2,424, down 2.9% from 2,496 in February 2016. More builders are starting to offer options at entry pricing levels, although many of these are a long way from the center of the valley. The average sq. ft. of a non-distressed resale was 1,987, so new single family homes are 22% larger on average than the existing homes that sold.
The market share (in dollars) for new single family homes has climbed from 15.7% in February 2016 to 16.3% in February 2017.

DEMAND

$2,114,979,912 each bag represents $75,000,000

Total price for single family homes sold in February.

Total single family, townhouse & condo sales were up 11% in February from a year earlier. Single family sales rose 11% and townhouse / condo sales rose 13% compared to February 2016.

Single family homes priced over $500,000 took 23% dollar market share, down from 25% last year. There was a 16% increase in unit sales over $500,000 but lower average pricing gave rise to only a 5% increase in dollar volume. Entry level single family homes under $200,000 lost market share from 20% to 17%, partly due to low supply. The mid range between $200,000 and $500,000 has robust demand and reasonable supply and grew market share from 54% to 60%.

7,156 Each house represents 500 units

Numbers reflect single family homes only.

AVERAGE PRICE PER SQUARE FOOT

Average price per square foot for single family homes gained 4.8% from $137.05 in February 2016 to $143.64 in February 2017.

SUPPLY

The number of active single family listings without an existing contract was 15,098 for the Greater Phoenix area as of March 1, 2017. This is down 1.5% since February 1, and we usually see a rise during the same period in most years. The inventory of single family homes under $150,000 stands at 40 days, 12% lower than a year ago. So far we have seen 3.0% fewer new listings created in 2017 than in 2016 and this is inadequate supply to match the increase in demand except at the highest price points. In the mid range between $200,000 and $500,000 we are seeing lower supply than last year and current demand is causing supply to tighten in the most popular areas.

CHANGES IN TRANSACTION MIX

We saw an increase in non-distressed transactions (up 14%), with investor flips up 21%. New home sales were up by a lower percentage than last month at 17% and distressed transactions fell 26%. We saw a 22% decline in third party purchases at trustee sales and new notices of foreclosure remain at very low levels. Reversions to lenders decreased by 28%.

So far 2017 has been quite similar to 2015 and 2016, but with the following notable differences:

  • The year-to-date closed transaction rate is up 15% over last year
  • New homes are gaining market share over existing home
  • Attached homes are gaining market share over single-family homes
  • Homes under $200,000 are getting ever scarcer

The increase in transactions is partly due to buyers qualifying more easily for loans. This is not because lending standards have fallen, although underwriting rules have eased a little. Instead it is because buyers have higher credit scores and are finding down payments more easily. It is now several years since the end of the foreclosure wave and those former home owners a ected are comingout of the penalty box and returning to the market with much better credit ratings than they had a couple of years ago. This trend is likely to be sustained for some time since the foreclosure wave lasted from 2007 through 2013. With a seven year expiry for foreclosures on a credit history, this corresponds to 2014 through 2020. We are currently at the peak for so-called boomerang buyers having their foreclosure deleted from their credit history. The bulk of the market strongly favors sellers over buyers, though this is much less true for the high end of the market. There are several fashionable areas where the luxury market remains strong, for example Arcadia and Old Town Scottsdale. In addition luxury condominiums are in short supply and high demand. However the current outlook calls for ongoing challenges for luxury single family home sellers in the more remote areas especially those with homes over $2 million. The mid range from $200,000 to $500,000 is currently very healthy and the lower end of the luxury market, from $500,000 to $1 million, is looking signi cantly stronger than last year.