Market Update: June Purchase Price and List Price Reach New Peaks, June Luxury Market Makes Comeback, July Predictions
August 5, 2020
V.P. Business Development & Real Estate Analyst, Grand Canyon Title Agency
June Best Month in 2020 for Sales and Median Purchase Price
June sales of single-family resales in Greater Phoenix (Maricopa County) were almost 2,000 more than in May. There were 6,736 sales in June compared to 4,796 in May. The number of sales in June were the most for a month this year beating the 6,121 sales in March. The number of sales in June of 2019 were slightly higher at 6,827. See Table One.
The median purchase price of a single-family resale in Greater Phoenix reached a new peak this June. The June median purchase price of $339,900 eclipsed the previous record of $335,000 set in both March and April. The June 2020 median purchase price of $339,900 was $32,615 or eleven percent higher than June 2019 when it was $307,285. The median purchase price in May dipped to $327,000 after some apparent panic selling. See Chart One.
The median list price of a single-family resale also reached a new peak in June. It was $359,000. The previous high was in May when it hit $350,000. It had dropped to $339,990 in April after some panic selling.
The number of new monthly listings for single-family resales were a problem before the coronavirus storm and continue to be. The number of June new monthly listings of 5,763 were the lowest for a month in 2020. Traditionally June is the month of the year that starts the downward trend for new monthly listings. What is different this year is while new monthly listings are seasonally decreasing, increasing is demand to purchase as the economy opens up.
How homes were purchased. In June, sixty-one percent of single-family resales were purchased with a conventional loan or jumbo loan, seventeen percent with an FHA loan, eight percent with a VA loan. There was a big drop off in cash purchases in June 2020 compared to June 2019. Cash purchases in June 2020 were 629 or nine percent of all purchases compared to June 2019 when they were 1,151 or seventeen percent of all purchases. See Table Two.
Luxury Market Roars Back in June
June 2020 sales of $1,000,000 and over made a comeback. There were 219 sales this June at $1,000,000 and over compared to 136 in May. This is an increase of 83 sales or sixty-one percent in just one month! See Chart Two.
Table Three shows the cities with the most expensive sales. To be included in the table a city had to have at least one sale of $3,000,000 or more. Scottsdale dominates the market for sales from $1,000,000 to $2,999,999, while Paradise Valley is the king for sales over $3,000,000. The highest price sale this June was in Silverleaf at DC Ranch. The home sold for $5,800,000. The listing agent was Laura L. Lester with Silverleaf Realty and the selling agents were Deborah A. Beardsley and Cynthia Kleerup with Silverleaf Realty.
Conclusion and July Prediction
For the last three years, from 2017 through 2019, the month of May had more sales than June. With the recent event, patterns have changed. In 2020, May is the month with the least number of sales, while June is the month with the most sales. At the start of 2020, before the coronavirus storm hit, new monthly listings of single-family resales were down year-over-year. In January 2020 they were down fifteen percent from January 2019. Lack of single-family resale inventory will continue to be a challenge. This lack will force buyers to travel further out in Greater Phoenix to buy a new home. Also, because of the current coronavirus environment some sellers are going to wait it out before they list. At the same time, there are buyers who no longer want to wait and want to own now. Since our traditional selling season took a hit this year, expect buyer demand to continue later into the season. In fact, the number of July sales and the median purchase price will likely exceed the good June numbers. If you like the information in this article go to www.TheWilcoxReport.com and sign up for more updates. The information in this article was compiled from ARMLS and is for single-family resales in Maricopa County.