JANUARY 2021 - MARKET UPDATE

2021 has begun much like 2020 ended - the Phoenix metro real estate market continues to perform at near-record levels.  In fact, most of the indices we use to measure the market are at levels not seen since 2005.  For instance, we have just one month’s supply of housing inventory currently, while our total inventory is down a whopping 36% year over year.  And demand continues to be through the roof, with multiple offers, often over list price commonplace.  Median appreciation over the last year is at 11.8% (higher in areas of greater demand) while overall days on market are down almost 20 days on average.  These are truly extraordinary figures.  We are often asked if they are sustainable and the short answer is: Absolutely!  There are a number of differences between today’s market and 2007’s.  Importantly, that market was built on sub-standard lending practices and appreciation rates in the 20 percentiles.  Today’s lending practices are far more stringent and appreciation rates in the low to mid-teens are healthy, especially considering that Arizona sits at number three in the nation in terms of net population gain, while the overall cost of living is relatively inexpensive.  What’s more, is that the luxury market is setting the tone for the overall housing market as we continue to see new benchmarks eclipsed for price per foot and total dollars sold in that arena.  Many more homes for over $2 million are sold in a very short period of time today - something the marketplace has not seen previously.  This suggests that there is no soft spot in the Phoenix metro housing market and that it will continue on its positive trajectory for the foreseeable future.  We advise our clients to buy now and be a part of the positive growth in 2021!