clearconnections

The Voice of Clear Title Agency of Arizona

MARKET UPDATE
October, 2016

Data supplied by Michael J. Orr

480.278.8484
www.cleartitleaz.com

Clear Title of Arizona is pleased to provide our clients with the Clear Connections Monthly Market
Update. This report will provide you with the latest real estate trends.
Our business is built around the concept of educating and providing the personal service that Real
Estate Agents and Lenders have come to depend upon. We want to provide accurate data to our
clients, associates and friends. It is intended to keep you informed on critical market trends that
impact our businesses.
Single family home sales increased year over year in
the three largest sectors, with new homes gaining
market share:

New Homes (up 30%)

Normal re-sales (up 6%)
Investor flips (up 6%)

Because of lower distress levels, single family home

sales decreased year over year in the remaining five
sectors:

Third party purchases at trustee sales (down 15%)

Bank owned homes (down 40%)
GSE - Fannie Mae, Freddie Mac, etc. (down 23%)
HUD sales (down 62%)
Short sales / pre-foreclosures (down 19%)

The change in total dollars spent on homes was more

favorable than the change in the unit count.

Total dollars spent on single family homes rose by

15% over September 2015.
Total dollars spent on townhouses & condos rose
by 19% over September 2015.

During September, average single family pricing moved

noticeably higher, reading $294,029, up from $288,543
last month and up from $272,543 in September 2015.
Average new single family home prices were 5.5%
higher than last year while the average new single
family home size has declined by 3.3% over the past
12 months.

clearconnections
The Voice of Clear Title Agency of Arizona

MARKET UPDATE

Median Sales Price

Percentages reflect the 2015-2016 comparison

The median sales price rose 8.8% from $225,000 in

September 2015 to $244,700 in September 2016.

Single family homes priced over $500,000 took

24% dollar market share, up from 22% last year.
There was a 25% increase in dollar volume but the
ranges over $2 million increased by 88%, while the
amount spent on homes between $500,000 and
$2 million was up 15% compared with September
2015. Demand has improved relative to September
2015 in many luxury areas while supply has fallen
from the extreme highs of the spring. Entry level
single family homes under $200,000 lost market
share from 22% to 17%, due to very low supply.
The mid range between $200,000 and $500,000
has robust demand and adequate supply and grew
market share from 57% to 60%.
Total price for single family homes sold in September

New Home Sales

August was yet another strong month for new
home closings. Newly-built single family homes saw
1,428 closings in September, up 30% from 1,101 in
September 2015. The total dollar value of single family
new homes closed in September was up 37% from
$382 million in 2015 to $522 million in 2016.
The average sq. ft. of a new single family home in
September was 2,454, down 3.3% from 2,537 in
September 2015. More builders are starting to offer
options at entry pricing levels, although many of
these are a long way from the center of the valley.
The average sq. ft. of a non-distressed resale was
2,024, so new single family homes are still 21% larger
on average than the existing homes that sold. This
percentage has fallen from 26% this time last year.

numbers reflect single family homes only

Total units for single family homes sold in September

The market share (in dollars) for new single family

homes has climbed from 17.7% in September 2015 to
20.9% in September 2016.

Demand

Total single family, townhouse & condo sales were

up 7% in September from a year earlier. Both single
family sales and townhouse / condo sales were up 7%
compared to September 2015.
numbers reflect single family homes only

clearconnections
The Voice of Clear Title Agency of Arizona

MARKET UPDATE

Avererage Price Per Square Foot Supply

The number of active single family listings without an
existing contract was 15,475 for the Greater Phoenix area
as of October 1, 2016. This is up 5.8% since September
1. The inventory of single family homes under $150,000
stands at a mere 34 days, although this is the same as a
year ago. Overall we have seen 4.3% more new listings
created in 2016 than at the same stage in 2015. We expect
active listing counts to rise during October and November.
New supply has been strong at the upper price points but
inadequate below $200,000. In the mid range between
$200,000 and $500,000 we are seeing plenty of supply but
current demand is more than strong enough to cope with
the new listings.

Changes In Transaction Mix

ALL SALES
New
Non Distressed

Average price per square foot for single family

homes gained 6.7% from $131.42 in September
2015 to $140.29 in September 2016.

Distressed
Reverted
9,00

2016

2015

1 - 9,000 scale; blue bars indicates 2016 numbers, dark grey bars reflects 2015 numbers.
change in transaction mix between September 2015 and September 2016
numbers reflect single family homes only

We saw an increase in non-distressed transactions (up 6%), with

investor flips up 6%. New home sales were up sharply by 30% but
distressed transactions fell 23%. We saw a 15% fall in third party
purchases at trustee sales and new notices of foreclosure remain
at very low levels. Reversions to lenders decreased by 23%.
The entry level market has been very short of supply all year, which has driven strong appreciation which looks likely to
continue unabated for a while yet. There is adequate supply in the mid range and growth in sales has been strongest
here. This suits the new home builders who are achieving remarkable growth in closed sales year over year. This too
seems likely to continue, along with mild to moderate appreciation. The bulk of the market strongly favors sellers over
buyers. This has been less true of the luxury market although September was a better month for luxury homes than
September 2015. There are several few areas where the luxury market remains strong, for example Arcadia, Old Town
Scottsdale and the DC Ranch area. There are also several upscale condo developments in fashionable locations which are
reported to be seeing strong buyer interest and some of these (e.g. Envy) have just started to record their first closings.
This will push the average price per sq. ft. higher for condos and townhomes. The current outlook calls for ongoing challenges for luxury
home sellers in the less fashionable areas since we expect a significant number of new listings will arrive over the next 6 months. We have
a large wave of baby boomers reaching retirement age and many are looking to downsize to more convenient and manageable lock and
leave homes, closer to amenities. This could lead to something of a glut of big detached homes on large lots and a corresponding shortage
of smaller, often attached, upscale homes with the contemporary features that these buyers are looking for.