The report, which includes Maricopa and Pinal counties, forecasts a number of positive developments in the local housing industry, a news release said:
- Median single-family-home sales price went up 5.6 percent from January 2014 to January 2015 − $197,000 to $208,000.
- Condos and townhomes continue to gain a larger share of the market.
- Preliminary February figures show demand about to boom, with the number of homes under contract dramatically rising.
The report was authored by Michael Orr, director of the Center for Real Estate Theory and Practice.
After the housing crash, Phoenix-area home prices quickly rose from September 2011 to summer 2013. Then, the median single-family home price went up about another 5.6 percent from last January to this January – from $197,000 to $208,000, with the average price per square foot going up 5.1 percent, the release said.
Condos and townhomes picked up even more momentum, with their median price up 11.6 percent – from $121,000 to $135,000.
While single-family home sales activity dropped 7 percent from last January to this January, townhome and condo sales activity rose 6 percent. In fact, the amount of money spent on mid-range townhomes and condos was up an incredible 54 percent, which Orr credits interest in easy-to-maintain homes, according to the release.
Despite the attached-home phenomenon, though, the Phoenix market experienced relatively weak home-sales activity both last year and in January. However, things finally appear ready to change.
“January is always a quiet month, but we believe this was a lull before the storm,” Orr said. “We have already seen early signs of much stronger activity from buyers in February and March. Looking at the number of homes going under contract, there was significantly increased demand in the lower and middle price ranges.”
Orr notes that listings for non-distressed homes under contract in the Phoenix area were up 26 percent from last year on a typical day in February. Listings from $150,000 to $600,000 were up more than 30 percent. He attributes this largely to lenders starting to relax their tight loan-underwriting guidelines and “boomerang buyers” who went through foreclosure or short sale being able to come back into the market, according to the release.
Rental homes are also doing well.
“With relatively fast turnover and low vacancy rates, rents have been increasing in the most popular locations,” Orr said. “We are currently seeing a 5.8-percent rise over the last 12 months across the greater Phoenix area.”
A few final notes, according to the study:
- Supply for all types of homes are at the lowest level in 14 years.
- Completed foreclosures were down 43 percent from last January to this January.
- In January, newly built single-family homes hit their lowest monthly sales total in three years.
For more information on the study, visit the W. P. Carey School of Business website here.