2018 Results — 2019 Predictions The Residential Real Estate Market in Maricopa County Arizona

Jay Bru Group 480-466-4917

Stats from the Wilcox Report

The total number of residential sales in 2018 was equal to the number of sales in 2017. According to data from The Arizona Regional Multiple Listing Services, Inc. known as ARMLS, sales in Maricopa County in 2018 were 84,001 compared to 84,049 in 2017. When the number of sales is broken down by the eight ARMLS residential categories, there were some small year-over-year differences. The only two categories in 2018 that were down year-over-year were single family and Gemini twin sales. Single-family sales were down 395 or less than one percent and Gemini twin sales were down 10 sales or 1.6 percent. The other six categories accounted for 357 more sales in 2018 over 2017. See table one.

Single Family Sales

Let’s review the residential category that by far had the most sales. Previously owned single-family home sales in both 2017 and 2018 were over seventy-five percent of all ARMLS residential sales. When comparing previously owned single-family sales year-over-year by month there was a difference during the first part of 2018 compared to the last part of the year. From January through June there were 679 more sales compared to the same time last year. Then from July through December, there were 1,071 fewer sales compared to 2017.  See table two.

New Listings: Previously Owned Single Family Homes

Overall new listings were slightly down in 2018 compared to 2017. There were 82,682 new listings in 2018 compared to 83,616 for a decrease of one percent or 934 new listings. For the number of sales to increase in 2019, there will have to be an increase in new listing inventory in the most desired price ranges. Expect fierce competition amongst real estate agents for listings in the most popular price ranges.

Median Purchase Price: Previously Owned Single Family Homes

In 2018 the median purchase price for a previously owned single-family home in Maricopa County reached an all-time high. Last May it reached $294,900 surpassing the pre-real estate recession high of $287,500 in June 2006. Sometime in the second quarter of 2019 it most likely will be over $300,000.  Chart one shows the median purchase price for a previously owned single-family home month by month for the last five years. As seen in the chart, the median purchase is always higher for the same month in the following year. In 2019 this trend should continue. The continual rise in the median purchase price means that there are very few homes still underwater in 2018. There were approximately 350 short sales in 2018, according to ARMLS data. There should be even less in 2019. Of course, while rising home prices increase household wealth, they decrease affordability, making it more difficult for potential first-time homebuyers to purchase. See chart one.

Chart one:

Dollar Sales Volume

Dollar sales volume for previously owned single-family homes in Maricopa County is the highlight of 2018! According to ARMLS data, the 2018 dollar sales volume of $24.6 billion represents the total purchase prices of 68,101 sales in 2018. See chart two. Only one previous year has finished with a higher dollar sales volume. That was in 2005 when it was $26 billion represented by 78,419 sales.

High dollar sales volume and the number of residential sales in Maricopa County are probably the main reasons new real estate companies, some with disruptive business models, have opened offices in Maricopa County. Because of the many different real estate companies and thousands of real estate agents in Maricopa County, expect there to be fierce competition amongst them in 2019 for sellers and buyers.

Chart two:

Competition in 2019

The competition in 2019 amongst real estate companies for sellers and buyers will not be the only battleground. Loan officers will be in competition for qualified buyers. Qualified buyers will be in competition for priced right listings.

Competition amongst loan officers for purchase business will increase in 2019 because of higher mortgage rates. For the last few years, low-interest rates have boomed the number of people refinancing into a lower mortgage rate. Refinances provided considerable business for loan officers. Because of the low number of households now refinancing a great portion of loan officer business is wiped out. Because of this, more loan officers will be going after the same purchase business.

Competition amongst buyers will increase in 2019 because the number of buyers is increasing. Why? More people are moving to Maricopa County. According to the U.S. Census Bureau, Maricopa County for the last two years gained more people than any other county in the United States. The population of Maricopa County has increased by 155,000 for the last two years. Prediction: When U.S. Census data comes out in 2019, Maricopa County for the third year in a row will be the number one county for an increase in population.

A major reason why Maricopa County’s population will continue to grow is the exodus of people and companies from states that have high taxes and difficult business regulations, and/or have very cold weather, and/or have a political environment that people feel is no longer friendly. Below in table three is the most recent domestic migration data from the U.S. Census Bureau. Maricopa County’s domestic migration was a net 38,852. Cook County, where Chicago is located, domestic migration was a negative 65,871 people. Los Angeles County lost 91,680 to domestic migration. A popular destination for people leaving Los Angeles County is Maricopa County. When the U.S. Census Bureau releases its 2019 migration data, we should see similar patterns as shown in table three.

Along with the increase in population has been an increase in jobs. The number of people employed in Maricopa County has gone up substantially in the last five years. In 2018 there were 272,600 more people employed than in 2013. By the end of 2019, there should be an additional 65,000 to 70,000 more people employed which will add to the number of people who will either rent or own.

2018 Results — 2019 Predictions The Residential Real Estate Market in Maricopa County Arizona

If you have any questions about these numbers, feel free to reach out to me!!

Jay Bru

480-466-4917

jay@jaybrugroup.com

Stats come from the Wilcox Report