Phoenix – Ahwatukee-Foothills Real Estate Update – August 1, 2020
This article is based on Allen Henderson’s Ahwatukee-Foothhills Real Estate Market Update that appeared in the Ahwatukee Foothills News on August 5, 2020.
After a strong showing in the first half of 2020, the July Ahwatukee real estate market continued to expand with the number of units increasing and the average price of closed properties rising. If we look at the July real estate sales results, the average sale price in Ahwatukee rose to $425,131. This is up 15% over the same period in 2019 when the average home value was $369,145. The July number of units sold jumped 22% from 148 units in 2019 to 180 units in 2020. The average number of days on the market stayed about the same at 55 days in 2020 versus 53 days in 2019. With the prices increasing and buyers stepping up with higher offers to get prime properties, the number of listings that required a price reduction to get an offer declined to 28% of the closed listings.
When we look at the bigger picture, the January to July average Ahwatukee sale price was $401,283. This is up 7.8% over the same period in 2019. Despite the surge in the average price from 2019 to 2020, the number of units sold fell 4.6% from 1005 units in 2019 to 961 units in 2020. At the time of writing, July 1, 2020, there were only 107 active listings in the Ahwatukee real estate market. It is safe to assume that the drop in the number of units sold in 2020 is a function of the low active listing inventory.
The average days on market measures the pace at which homes are selling and it is a good indicator of the strength of the real estate market. The number of days on the market, in the January to July time frame, dropped from 63 days in 2019 to 49 days in 2020. Homes sold on average 29% faster in 2020 than in 2019. We can assume from this that the strong seller’s market we have seen for months is getting even stronger. As the market heated up and prices expanded, the number of units that required a price reduction to get an offer and contract, declined from 40% of the units sold in January to July of 2019 to 28% of the units sold in the same period in 2020.
There were three sales of properties over a million dollars in the July 1 to July 31 market. They went under contract in an average of 91 days versus the usual average of 181 days on market for million-dollar-plus properties.
Considering the 180 units sold in July, the 107 active listings will be depleted in less than seventeen days. Anything less than a six-month inventory is considered to be a seller’s market. The Ahwatukee-Foothills market remains a very strong seller’s market.
Interest rates remain at record lows. Money is inexpensive and is encouraging buyers to foray into the market in increasing numbers.
The robust Ahwatukee real estate market indicates that consumer confidence is high despite the virus and political turmoil. We were fortunate that the sale of real estate Arizona was allowed to continue during the early days of the COVID-19 crisis. We never experienced the slowdown other regions of the country had due to the virus. Many parts of the country did not allow the sale of real estate and those markets are now in recovery mode.
Despite our strong real estate market, we are frequently asked about the long term outlook for the local real estate market. There are obvious concerns as the Phoenix metro-area was hard hit in the 2008 real estate debacle. We don’t have a crystal ball, however, it is the consensus of the experts that real estate in general and Ahwatukee real estate in particular, will remain strong and expand.
For example, Forbes magazine stated, “A business-friendly environment, plentiful job opportunities and affordable cost of living have pushed Phoenix to the top of the list of the fastest-growing cities in the United States. … Phoenix placed No. 1 on the list with an increase of 25,288 new residents between 2017-2018.”
In September 2019, According to a news report (3TV/CBS 5) — stated that, “more than 200 people are moving to Phoenix every day. The report from Bloomberg said Phoenix is the fastest growing city with year-over-year resident influx in the country.”
Phoenix Business News reported, in 2018, the last year for which Census Bureau data are available, “the population of a mid-sized city, over 65,000 Californians, migrated to Phoenix and Arizona. Texas and Illinois were next on the list in the U.S., but after California, the next largest source of the new inbound population to Arizona was from Asia, increasing the workforce quality, according to the Census Bureau.”
Renowned Arizonan economist Elliott Pollack, CEO of Elliott D. Pollack & Co. has stated that “The state is third in job growth. Greater Phoenix is third out of 36 major metropolitan areas for employment growth,”
The economic outlook is strong. The jobs market is rebounding after the declines caused by the virus. The Arizona and Phoenix population continues to grow at a rate of 250,000 people per year. Phoenix is attracting new workers with better educations and job skills. As the population continues to grow, low-interest rates and pent up demand motivate home buyers. Demand is high and increasing, for homes in the Phoenix and Ahwatukee real estate market. Buyers are responding by getting into the market before the prices are pushed higher. The Ahwatukee-Foothills real estate market remains a strong sellers’ market. It is an unprecedented opportunity to sell an Ahwatukee property.