May 2015 Market Update

May 2015 Market Update

April was another good month for the real estate market. The greater Phoenix area saw over 6,800 sales. Year to date sales are up over 9% from 2014.

The market is particularly tight in the $100,000 to $300,000 price range were listings are about 1/3 less then last year. This should continue to put upward pressure on pricing in that range.

Based on the current rate of sales there is only about 1.4 months of inventory on the market in the $100,000 – $200,000 range.  There is about 2 months of inventory in the $200,000 to $250,000 range, and 2.7 months of inventory in the $250,000 to $300,000 range. Four months inventory is considered a balanced or normal market.

Another sign of a continuing strong market are rental rates. The average rental rate is up to $1,225 up from $1,170 and average days on market are down to 29 for rentals listed on the MLS. Landlords were responsible for 12.2% of April sales. The higher rent rates will allow those investors to justify staying in the market at higher prices and by still be able to generate an attractive return on investment.

The Cromford Report indicates that the real estate demand index is at 101.9% of normal. In contrast the current supply of available listings is at 77.2% of normal. Until we see those two numbers come together it will remain a sellers market with upward pressure on pricing and less selection for buyers.