Has the Phoenix Real Estate Market Recovered?
Supply between $150K-$200k continued rising in August. However the $150K-$175K range had a more dramatic rise. While still 26% below last year, it rose 17% since the beginning of June, a strong departure from the weekly decline this market experienced in the first half of 2017. For buyers in the rest of the market over $200K, nearly all price ranges are running lower than last year with the exception of the top tiers. For those buyers who have seen every listing available and still haven’t found a match, late September usually sees an increase in new listings across the board. This makes the 4th quarter a good time to be a buyer.
When do we know the Phoenix residential real estate market has “recovered”? Many people assume when prices have returned to 2006 peak levels then the market has recovered. However understandable, especially for those who purchased during that time frame, that’s not necessarily the case. Average sale prices per square foot are still 27% away from the peak of 2006. However, the market could arguably be considered recovered once prices reach the range that corresponds to the long term average rate of inflation, which from 2000-2016 in the United States is 2%. In 2000, the average sales price per square foot for MLS resales was $96. Had the bubble and crash never happened, and annual appreciation stayed between 2-3% per year as normal, then prices would land between $134-$158 per square foot today. Currently they’re running at $149, which equates to averaging nearly 2.6% annually and a 55% total gain since the year 2000. .