Absorption rate – March, 2017

Absorption rate is the percent of sales that are sold each month of the inventory. A higher percent means that inventory is moving at a faster rate, and thus is a Seller’s market. The total absorption rate for metro Phoenix is at 37% for the month of March, 2017.

Certain areas of the metro have higher performance of absorption rates, they are —

  • South East Valley (Chandler-Mesa-Gilbert) 49.7%
  • North West Valley (303 loop) 49.7%
  • Apache Junction 49.6%
  • Peoria and Glendale 47.0%
  • Desert Ridge 44.0%
  • South West Valley 44.0%
  • Ahwatukee 38%

The luxury homes sector, $1 million and more, has the lowest absorption rate at 7% only.

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Market Snap Shot – March, 2017

As of March 31, 2017, we sit at 19,397 active listings. Sales are at 8,943 for the month of March 2017, up by 2,053 units since January, 2017! Pending sales are 7,714 vs. a quarter ago at 4,935. We are currently at 2.2 months of supply. Traditionally, 3-4 months of supply indicate a balanced market.

March resale homes and new builds in Maricopa County were 10,818. In December, they were 8,685. It was 9,639 March, 2016. This is a 12% increase year over year.

1st quarter of 2017 was reported record unit sales since quarter 1, 2006!

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ARMLS RENT Check™ – March, 2017

For the month of March 2017, all RENT Check indicators showed great momentum comparing to  previous quarter, Dec 2016.

  • Median Lease: $1,328 – Healthily increased 4.16% from $1,275 previous quarter.
  • Average Lease: $1,470 – Slightly increased from $1,444 previous quarter.
  • Avg. Days on Market: 31 – Decreased 16.22% from 37 days of previous quarter.
  • Rent Check Quotient™: 3 : 10 – Remained flat as 3 : 10 last quarter.
  • Closed Rental: 2,291 – Increased 8.63% from 2,109 homes previous quarter.

Rent Check Quotient™ (RCQ™) is the ratio of closed rentals and closed sales.

Cap rates are still around 3.5% – 4.5% yet be careful about the potential mortgage interest rate hike.

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Mortgage Interest Rates Update – April 10, 2017

CONVENTIONAL
30 Yr 4 to 4.25 APR 4.28
15 Yr 3.25 to 3.5 APR 3.59

ARMS
5 Yr 3.375 to 4 APR 4.1
7 Yr 3.875 to 4.375 APR 4.41

FHA/VA
30 Yr 3.5 APR 3.56
15 Yr 3 APR 3.12

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Housing News – April 11, 2017

Home prices appreciated by 1% in February and 7% year-over-year. CoreLogic forecasts home prices will rise by 4.7% in the year going forward.

Newly built homes have gotten pricier over the last 10 years, with most homes selling above $250,000. Builders blame regulatory burdens for the increases.

The most recent Census Bureau stats show town homes as the fastest growing segment of the single-family housing construction market, with a 17.8% surge.

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