Median Sales Price up 5.9% to $270,000 in Greater Phoenix
Sales Rebound, Up 3.7% Over Last Year
The median rent paid on single family rentals through the Arizona Regional MLS is currently
$1,625 per month, which is comparable to what the mortgage payment would be on a medi- an-priced $270,000 home with 4% down at today’s interest rate (including approximate taxes, homeowners insurance and mortgage insurance). If a buyer were to purchase that home to- day, within 5 years they would have nearly $35,000 in equity just from making their mortgage payment, not including any appreciation in value. If prices were to rise at a modest 2.1% per year (the average long term rate of inflation) within that same 5 years, then they would have an additional $43,000 in equity just from appreciation. This scenario would result in $78,000 in total equity within 5 years and by year 3 they would be able to remove any mortgage insur- ance from their payment, which would save another $200 per month approximately.
Low interest rates are continuing to fuel buyer demand and there are now 2.5% more listings under contract today than there were last year at this time and 3.7% more sales. All in all an impressive rebound as interest rates have remained below 4.2%, keeping affordability stable for the time being. Increased demand in the 2nd quarter has resulted in strengthening the weakening seller market after a full 7 months of decline. May is typically the highest month for listings under contract and buyer activity is expected to decline from here through Decem- ber as it typically does every year. Don’t think you’ve missed the boat if you need to list how- ever. On average since 2001, about 52% of all sales happen in the first half of the year and
48% in the second.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2019 Cromford Associates LLC and Tamboer Consulting LLC