The year started badly for homebuyers in the West Valley and it didn’t take long to get worse.
So said the Cromford Report, which closely analyzes the Valley’s housing market.
It reported two weeks ago while Maricopa County is welcoming new residents by the thousands, active listings of homes are down by 30 percent from where they were when 2019 began.
Last week, Cromford had even more distressing news for buyers looking in the West Valley, saying while the Valley barely held onto the pattern of having more homes listed by Jan. 15 than there were on Jan. 1 of any year, “significant segments of the market have broken the rules and reported lower active counts on Jan. 15 than Jan. 1.”
It specifically cited every community in the West Valley.
Avondale had 75 listings Jan. 30, down 57% from 176 listings the year before. Buckeye’s 377 listings were down 21% from 2019.
Goodyear was down 37%, from 450 listings this time last year to 283 this year. Litchfield Park was down 30%, with 104 listings compared to 149 last year. Tolleson had 42 listings, 57% less than last year’s 97.
Glendale was down 57%, from 554 listings to 236.
Peoria had 352 listings Jan. 30, 49% less than the 691 last year.
Overall, the fact listings were higher by mid-January than they were when the year began Valley-wide wasn’t all much to cheer about either, according to Cromford’s data.
Inventory this month rose a paltry .8 percent between Jan. 1 and Jan. 15 – a far cry from the 7.2 percent increase in available homes for the same time period in January 2019.
“Not only are they not getting a flood, new listings are also well below what we would normally expect,” Cromford said.
“After two full weeks, we have seen fewer than 4,000 new listings across all areas and types – down 15 percent from last year at this time.
“This is an unexpected turn for the worse for supply and if it keeps up, we are going to see unusually weak supply during the key buying season kicking off in February. The competition for the listings that do exist will be intense.”
Even scarier for homebuyers in 2020 is rising price.
For the first time in Maricopa County, Cromford reported, one community registered a shocking statistic: The average price of single-family active listings in Cave Creek exceeded $1 million.
While homes on the perimeter of the metro area, such as Florence, are seeing square-foot price increases of 10 percent, others closer to the center are seeing prices rise by 8%.
“Most of the larger cities are around 6% at present but heading higher,” Cromford reported.
The imbalance between supply and demand is driving prices, but so too is the rapid increase in people moving to Maricopa County, particularly from other states and especially from California.
“The lack of supply can only be described as shocking,” the Cromford Report said of the overall situation confronting buyers in the county, noting the 30% decline puts inventory at the lowest level since August 2005.
“Anyone who thinks this severe shortage will not result in a significant rise in prices is going to have another thought coming pretty soon,” it added, noting:
“The median sales price is already up 11% over the last 12 months and the average price per square foot is up almost 9% and probably heading for a double-figure appreciation rate.”
Stating analysts “are clutching at straws here to find something indicating a little cooling in the market,” the website reported demand remains higher than normal.
“The big hope for buyers must be for a surge in new listings arriving over the next 12 weeks,” it said. “Perhaps sellers will be tempted by the higher pricing they can achieve. However, if they are staying around Phoenix, they will have to pay more for their new home too.
“Phoenix is currently the strongest large-city housing market in the USA and this is fueled by inter-state population movements. Retirees are a big part but so are people moving here from California and other Western states for work and the lower cost of living. Demand is likely to remain healthy despite the rising prices.”
Buyers who are prepared to spend more than they want on a house have to pray for a change “in the meager supply of homes” within the next three months, Cromford said.
But it dampened hope by reporting last week, “Unfortunately, early indications are exactly the opposite, with the weakest start to the year we have recorded since 2005.”
While conceding “it is a little too early to be drawing firm conclusions,” Cromford said initial signs in the market “suggest the supply problem will intensify rather than get resolved.”