How Can You Be Successful In a Changing Real Estate Market?
The chart above should give you a sense of just how dramatically homes have appreciated recently here in the Valley. You can clearly see the Covid effect bottoming out in May last year, as well as the rapid acceleration in 2021. Yes, the chart shows 36% year-over-year appreciation in the greater Phoenix area. That is insane.
More interestingly, in the last 2 months, the average sales price per square foot has risen over 9% in the greater Phoenix area. That is equivalent to an annual appreciation rate of over 55%!! And for the first time in history, the monthly average price of a single-family home in Phoenix has exceeded $509,000. One year ago, the average was just over $390,000. Yeeowsa.
The Market Balance is Shifting
While those figures are astonishing, we should not be surprised if the summer months are far less dramatic than the spring. It will likely be imperceptible for a while, but balance in the market is beginning to shift. Those of you who read these articles or subscribe to my blog know that I rely heavily on statistics, and one of the best is the Cromford Market Index. (CMI) The CMI is a value that provides a short-term forecast for the balance in the market. While the index is still at record highs in the seller’s favor, it is trending slowly to a more balanced market.
I hate quoting a bunch of numbers that will make you sleepy so I will again use a graphic to give you a visual sense of the balancing trend.
In this chart, you can clearly make out the downward trend for sellers. But . . . I need to give you some perspective. The lowest CMI score on this chart is 48 points higher than the highest CMI value in the history of the index which is over 20 years old. Including the fake loan days back in 2006!
SO NOW WHAT?
If you have had any thoughts about buying or selling you might be asking yourself, “Now what should I do?” How do you navigate through a shifting market? While it is certainly self-serving, I would suggest using a trusted experienced local expert.
The last year was absolutely unprecedented in our history. Not just in terms of the incredible appreciation, but having to sell homes in a pandemic! We had to quickly learn to adapt our practices to protect our clients. We sold homes last year that the buyers never entered until they owned them. Talk about unprecedented!
We Got This
The Scott Gaertner Group does not sell the most homes in Arizona, or Phoenix, or even Scottsdale. But we do sell the most homes in Scottsdale North. That is our niche and our specialty. It is what we love and are good at. Over the last 12 pandemic months, the Scott Gaertner Group sold almost twice as much as any competitor in Scottsdale North, and averaged over $100,000 more per home! (BTW – We don’t sell bigger better homes. That is on an average price per square foot basis. See the back page of this paper for more)
This is not something we do part-time. For the same commission dollars, you get an entire team of professionals who specialize in your neighborhood representing you and helping others to understand why this area is the best place in the valley to live. We have specialized in Scottsdale North for over 30 years and are constantly adapting and improving our services to ensure you have state-of-the-art representation.
So if you are looking to buy or sell this year, or know someone who is, give us a call. Nobody will give you better advice to ensure your success.