There is plenty of information about the housing market on the internet, on Facebook and on the local TV news, including numbers, forecasts and speculation about may happen later this month or next year.
In the Phoenix metro, with a shortage of homes driving prices higher, one popular question is: which city in the Valley is the most affordable to purchase a home? After all, a lot of Maricopa homeowners moved here because of its historical affordability.
Sometimes, news articles about the house market in our fair city pop up in my web searches or my local news. I often wrestle with trying to figure out if they are written by local experts or someone sitting in an out-of-state office trying to analyze our market without ever having never been down State Route 347.
The truth is, and I drive on the 347 all the time, the housing market in Maricopa is absolutely in proportion to the rest of the Valley, and in this specific case the word “proportional” is synonymous with “crazy,” “insane” and “out of control.”
In this wild market, I wanted to analyze regional and local data to see how Maricopa compares price-wise to the rest of the Valley. Is its reputation for home affordability deserved today, or should buyers be looking elsewhere to get the lowest price?
HOME SUPPLY DWINDLES
The Arizona Regional Multiple Listing Service (ARMLS) database contains homes listed for sale with real estate agents in Maricopa, Pinal and Cochise counties.
In a normal housing market, the ARMLS shows about 20,000 homes are for sale throughout the Valley at any given time. Currently, there are only 3,804 active homes on the market with no accepted offers, about 80% fewer than typical. Obviously, that means buyers have a lot fewer homes to choose from.
In March 2019, the Valley had 2.7 months of supply which means that if no additional homes were listed it would take 2.7 months for those homes to sell. In March 2020, that had dwindled to a 1.3-month supply. In March, the Valley had just a 15-day supply of homes.
Currently about 2,000 homes are listed weekly, the lowest number of listings added in the past 20 years.
Once listed, a well-priced, nicely showing home is going lightning fast everywhere in the Valley. The more expensive a home, the longer it generally sits on the market. In a normal market, the average time a listing waits for an accepted offer would be about 70 days, but currently it is about half that period.
One item to keep in mind is that higher priced homes sit on the market longer, and that applies to even the submarkets in each city. For instance, Maricopa homes listed at $265,000 sell, on average, 14 days faster than homes in the $425,000+ range.
PRICE PER SQUARE FOOT
The last criteria in comparing the affordability of cities in the Valley is price per square foot.
If buyers are just beginning a search of homes in the Phoenix area, with a focus on getting “bang for the buck,” what will they find in their search?
The data shows if they are considering the West Valley, they probably want to look for a home in Tolleson or Avondale. But in the Southeast Valley, Maricopa and Casa Grande currently offer the most home for the lowest price. In fact, our hometown and its similarly-sized neighbor to the southeast, plus San Tan, make it a Pinal County 1-2-3 atop the list of three most affordable cities in the Phoenix metro.
With the current market, long gone are those days of making an offer 10% under asking price and requesting that the seller provide a home warranty and concessions. Today, nearly 49% of homes sold in the Valley are selling for higher than the listing price, with about 24.5% closing at asking price and 26.5% under asking price.
So, what are prospective homebuyers to do? Here’s a few tips:
- Make your best offer initially. Some sellers may be so inundated with offers, they may only reach out to the top tier of offers. You may not get a change to adjust your offer.
- Consider letting sellers stay in the home for an agreed-upon number of days after closing – gratis.
- Remove contingencies (appraisal/inspection) that you feel comfortable letting go.
- Think outside the box. Sometimes you can find out what the seller “wants” and tailor your offer accordingly.
- If you are not currently living in the Phoenix metro area, make sure you are working with an agent that you trust and has the availability to view a home on your behalf ASAP. If your “dream home” isn’t for sale today, it may come on the market tomorrow, and you will want your agent responding the same day.
- The worst case is a virtual showing. Have your agent set up a Facetime from the house and walk you through it. Ask for a floor plan to get room dimensions, when available.
Brian Petersheim is a Realtor with HomeSmart Success in Maricopa.