Phoenix – Ahwatukee-Foothills Real Estate Market Update – March 1, 2020
After a sluggish start in January, Ahwatukee-Foothills property sales rebounded in February with 113 closed listings at an average sale price of $376,647. This is up from the average property value of $374,840. that we saw in the 2019 Ahwatukee Foothills real estate market. The average value in the January 1 to February 29, 2020 period still lags last year’s pace with 211 sales at an average value of $361,978. It appears that the drop in values we noted in January was a one-month aberration. The market is rebounding as we proceed further into the year. As we have said previously, one month doesn’t make a year.
The average days on market for an Ahwatukee-Foothills closed listing was 67 days in February which is up from the 58 average days on market in January. With the historic low listing inventory we experienced throughout 2019, and now into 2020, it is surprising that the average days on market for closed listings is still almost two months. There is pent up demand and buyers are anxiously waiting in line for nicely updated properties that are priced competitively.
Many home sellers are still under the mistaken impression that the low inventory will allow them to list high in the hopes of selling at a higher price. The almost two month marketing times and the slow and steady increase in values, we are seeing, disprove this practice. For example, in all of 2019, 40 percent of properties required a price reduction before they went on contract. In January and February of 2020, 36 percent of closed properties required a price reduction before going under contract. This is a theme that we have noted and reported consistently. It is a troubling statistic. Home sellers list high, hoping to get a higher price for their property or to have wiggle room in the negotiation with the buyer. In spite of being in a strong seller’s market, their properties languish on the market with no offers. In disappointment and frustration, they reduce the price. They have lost marketing time. Their property has been passed over and they will probably sell for less than if they had priced it correctly within 3% of the recent comparable sales.
So what is the best practice home sellers should follow. We always recommend that sellers list their properties within 3% of comparable sales. There is no basis for the assumption that listing high will yield a higher price. Listing higher will always result in frustration and disappointment.
For example, over the course of 2018, the average price of a property in Ahwatukee-Foothills increased a little over 8%. This increase was less than 1% per month over the course of the year. Over the course of 2019, the average price of a property increased a little over 5%. This increase, in the average property value, was less than a half percent increase per month. In spite of this we see, month after month and year after year, sellers listing their properties 10% over the comparable sales. What is the rationale? Why would you list a property, 10% higher than comparable sales and expect it to sell in a market that is increasing at a rate of less than 1% per month? The net result is that these sellers who list too high, invariably, have to reduce their price to within 3% of the comparable sales to get an offer. They have lost marketing time and endured frustration and disappointment, only to reduce the price or cancel the listing and take the property off the market.
Let me give you an example of a very successful real estate transaction that I experienced this week. It is an example of the best practices for home sellers in any market. Yesterday, we represented buyers who made an offer to purchase an Ahwatukee-Foothills property. The property was what we call an emotional property. It was highly upgraded, staged perfectly and very well maintained. Most importantly, it was priced at the value of comparable sales. Our buyers loved it. There was a lot of showing activity. Our buyers wrote an offer at $5,000. over the asking price. The buyers considered the $5,000. an insurance policy to secure the contract. The offer was immediately accepted and our clients now have the property under contract. Despite being highly upgraded, had this property been over-priced, our buyers would have hesitated and moved on looking for a better value. This well priced, beautiful property, was an irresistible value and went under contract in less than a week and for over the asking price.
I frequently tell home sellers they have to get in the ballpark to play the game. If they list within 3% of the values of comparable closed listings, they are in the ballpark and get to play in the game. If they elect to list too high, they might as well be in the bleachers, because they are only going to get to watch the game as other well-priced properties get traffic and offers.
In summary, the Ahwatukee-Foothills real estate market is active and strong. Mortgage rates have been at record lows for months and predictions are they will drop even lower. At the time of writing, February 29th, 2020, there are only 121 active listings in the Ahwatukee-Foothills market. It is still a strong seller’s market. Demand is high for well priced, nicely upgraded and well-maintained properties.
There has never been a better time to list and sell an Ahwatukee-Foothills property. Home Sellers need to know that there is nothing to gain by trying to test the market. The market is what the market is. There is nothing to be gained by listing high in the hope of getting more money. There is nothing to be gained by listing high to have wiggle room during the negotiations with a buyer. As always, make your property as attractive as possible and list it at or within 3% of comparable sales to get it sold at the best price possible and in a timeframe that meets their needs.
Pick your real estate agent wisely!
I am available for any questions
Henderson Real Estate
*Ahwatukee Foothills is the official name of an Urban Village in Phoenix. Ahwatukee Foothills lies south of South Mountain Park. “Ahwatukee Foothills” is comprised of zip codes 85044, 85045 and 85048. Some confusion occurs when some folks refer to Old Ahwatukee as “Ahwatukee” and “Ahwatukee Foothills” as a separate entity. So, for clarity, when we use the term “Ahwatukee” we are referring to the entire area designated “Ahwatukee Foothills,” including (85044, 85045, and 85048) unless otherwise noted.