Phoenix Housing Market Update – March 30, 2012

Number of Houses for Sale

Not surprisingly, the total number of houses for sale across the Greater Phoenix Area fell again this month. This time by a little more than 7% of last month’s number.

As Mike Orr of The Cromford Report put it: “The supply shortage is getting increasingly severe as new listings are now being added to ARMLS at the slowest seasonal rate since the current ARMLS database began in 2000.”

And you know what supply shortages usually cause…

Average Home Sale Price

Rising home sale prices. In fact, the Phoenix area set a new record on March 28th when the average home sale price per square foot rose 8.68% over a single 30 day period. This beats the fastest price rise we saw during the boom years, which was 7.47% on February 2, 2005.

As quickly as prices are rising, it still seems to be manageable and justified. This is because home buyers know they are receiving discounts of 50% and even 60% off of peak pricing, and mortgage interest rates are under 4.00% for most FHA, VA, and Conventional loan buyers. Back in 2006, the average mortgage interest rate on a 30-year fixed rate loan was close to 6.50%!