Residential real estate values in Phoenix quietly crossed a notable threshold in May 2018. The median sales price of homes around the metro topped the high-water mark first made in June 2006.
That descent and climb took 11 years and 11 months. The residential market has clawed its way back.
At that time, the median sales price reached a peak of $264,800. Then a wave of bank foreclosures and tightened mortgage underwriting standards collapsed the inflated “easy-credit” housing prices. The median sales price for greater Phoenix bottomed out in May of 2011 at $108,300.
Now, foreclosure activity is at its lowest point nationally in over a decade. The number of Arizona mortgages in a state of delinquency (30+ days overdue) is only 2.7% of all outstanding Arizona home loans. This number is lower than the national average of 4.2% of home loans in delinquency.
Recently published 2018 data from ARMLS reveals that within the last 60 days, the median sales price in Phoenix has reached $265,000; slightly higher than the 2006 top. This is also the highest median price level ever recorded by ARMLS for the month of May. ARMLS is the Arizona Regional Multiple Listing Service. Its the largest MLS in Arizona and aggregates listing data for its subscribers and Realtor members.
Here is the chart compiled by ARMLS and published in its May STAT 2018 report.
The median sale price above is determined by choosing the midpoint dollar value of all MLS residential real estate transactions in a given month. Half the home sales are above, half are below. It is important to note that the home prices in this analysis are nominal and are not adjusted for inflation.
Higher home prices around the Phoenix metro are being driven by a shortage of inventory for sale under $300K. Adding to the pricing pressure for buyers are rising rents, competition from investors and an urgency to beat rising mortgage rates.
What is at a peak is certain to decline. – Cao Cao, Chinese statesman, and Chancellor of the Eastern Han dynasty, 155-220AD