The Maricopa residential real estate market continues to tighten as active listings are down 45% year over year and down 30% in the last 30 days. There are just 102 resale subdivision homes currently available on the MLS listed at an average of $126.51 per square foot. In addition to those resale homes there are 41 active new-build homes on the market listed at an average of $138.75 per square foot. So combined, there are only 143 subdivision homes currently available.
On the demand side, 280 homes are currently under contract, so based on current demand there is less than a 30-day supply of homes, and as a consequence home values are on the rise. Over the last 6 months, the average sold price per square foot for resale homes is $112.95, and for new-build homes that sold average per square foot is $126.16.
To put those numbers in perspective, the closing averages for both categories from the same time period last year is a selling average of $105.17 per square foot for resale homes, and a $118.38 selling average for the new-builds, so in the last 12 months the appreciation rate for resale homes is 7.3%, and 6.5% for new builds.
Now the big question is, how will the current coronavirus affect the housing market and liquidity in the financial markets. The short answer is that there has been no impact yet, and with the stimulative actions the Fed took this last week the financial markets will remain flush in the short term. Current 30-year mortgage interest rates continue to be at historic lows and the Fed has indicated that there may be another cut next week by as much as three quarters of a point.
That being said, treasury yields are down 17% and that may have an effect of pushing rates up slightly in the next few months, particularly if this hysteria continues. How does that affect buyers? Very little in the short term. As mentioned earlier the liquidity markets are strong, interest rates are low and buyers have a range of loan programs to choose from.
There’s an old Chinese proverb that says “may you live in interesting times.” Well I think we are there. Just know that this too shall pass and in my opinion much sooner than people realize. Have another good week.