May 12, 2018
V.P. Business Development & Real Estate Analyst, Grand Canyon Title Agency, Inc.
2018 Dollar Sales Volume Hits All-Time High for a First Quarter
Strong demand to own a home in the first quarter of 2018 led to the highest dollar sales volume ever for a first quarter. The previous first quarter with the highest dollar sales volume was in 2005. First-quarter dollar sales volume for both 2005 and 2018 was over $5 billion with 2018 being $445 million higher than 2005. Dollar sales volume measures the strength or weakness of a market. It is calculated by adding the sale price of each sale for a total. The dollar sales volume in this report is for previously owned single-family home sales in Maricopa County. Previously owned single-family home sales are 80 percent of residential sales, making it the most popular residential product for buyers.
When comparing first quarter 2018 to first quarter 2017, there were 16,227 sales in 2018, which was 4 percent higher than the 15,602 sales in 2017. The median sale price in first quarter 2018 was $277,000, a 5 percent increase compared to $255,000 in 2017.
Demand to Own Fueled by Population, Job, and Wage Growth
Population Growth: According to the U.S. Census Bureau, Maricopa County was ranked the county with the greatest increase in population for the second year in a row. The population of Maricopa County increased by 73,650 in the 2017 rankings, or 202 people a day. Finishing second was Clark County, Nev., with a population increase of 47,355, or 130 per day.
Top 10 Largest-Gaining Counties (Numeric Increase): 2016-2017
Job Growth: In 2007, there were 1,865,800 people employed in Maricopa County. In 2010, there were 225,700 fewer people working. Back then, many people who lost their jobs stopped making their mortgage payments. Mortgage payments not made lead to foreclosure notices. Foreclosure notices lead to cheap REO sales driving down home values. This is far from the situation today. In 2017, there were 325,900 more people employed than in 2010. Since everyone has to live somewhere, a growing number of employed people creates a lot of competition for existing inventory. Prediction: by the end of 2018, the average monthly number of people employed will be over 2,000,000 per month for the first time!
Rising Wages: At the time of this writing, only wage information for Arizona was available. Maricopa County, which is located in Arizona, is home to 71 percent of all employed workers in the state. According to the U.S. Bureau of Economic Analysis, average state earnings for the 50 states increased 3.1 percent in 2017. Earnings are defined as wages and salaries. Arizona earnings were above average. Arizona had the third-highest earnings at 4.8 percent, behind only Idaho and Washington. Healthcare led Arizona’s earnings with an increase of 6.4 percent.
There is a lot of news that positively affects the Maricopa County real estate market. Population, job, and wage growth should continue to increase. These increases will keep the competition amongst buyers of single-family homes fierce. Also, because of the sheer dollar sales volume of the market, expect increased competition amongst real estate companies as more of them — some with new business models — enter our market for a piece of the action. I do expect 2018 will end up being one of the best years ever for the Maricopa County real estate market.