Single family housing prices have sky rocketed since the end of 2011. According to Michael Orr, Director of the Center for Real Estate Theory and Practice at Arizona State University’s, W. P. Carey School of Business, the median sale price for a single family home has risen 32.4% from $110,000 ro $147,000 in a single year. The average price per square foot has risen 22.2% from $80.30 to $98.14.
Condo and townhouse prices rose in Phoenix by an even larger percentage of 37.3% from $69,900 to $96,000 where the average price per square foot rose 23.1% from $84.89 to $104.05.
According to a local Phoenix based real estate broker, a significant interest from the investment community and especially private equity, the inventory of available homes for sale in Phoenix, Scottsdale and the surrounding areas has dropped 50% in June 2012 as compared with a year earlier. Those home owners facing imminent foreclosure has also dropped off significantly as a result of lenders willingness to consider short sales in lieu of a drawn out and expensive foreclosure process. Single family home completed foreclosures were down 52% in May 2012 from the year earlier. 71% fewer homes were actually repossessed by lenders in May 2012 as compared to the previous year.
This lack of supply continues to constrain excess demand from buyers in the Phoenix / Scottsdale metropolitan area (specifically Maricopa and Pinal counties). Prices of single family homes increased year-over-year as follows:
- New Home Construction (up 57%)
- Traditional Home Resales (up 74%)
- Short Sales / Pre-foreclosures (up 15%)
Maricopa county saw home sales drop in May 2012 by 4.1% to 8,688 and Pinal county experienced a drop of 18.2% or 1,019 as a result of housing inventory constraints.
Constrained Inventory and prices in Greater Phoenix Housing Conditions