50% Sell Over List Price... But House Prices Are Flat!
Is Under-Pricing Customary Now?
No video this week.
Slow-Motion Auctions Despite Flat Prices
The median single-family house price has been flat for 3 months in Maricopa County BUT half of the houses sold last month sold for MORE than the list price, according to The Cromford Report! Shouldn’t prices go up when half the houses sold for more than list price?
Read last week that in some markets like Australia and Scotland it’s typical for the list price to be the opening bid/reserve price.
Full-blown auctions are common in Australia, especially when the market is hot. The list price in that case is the minimum opening bid price.
In Scotland, the price is typically listed as “offers over” and then a price. They’ll often give a date when offers will be reviewed. Sounds a LOT like Phoenix 2021.
In Phoenix, it used to be that if a buyer offered to pay the list price, the seller would usually be happy to sell the house for the list price. That is, except back in the bust with short sales and REOs when some listing agents would intentionally under-price the house in order to generate multiple offers so the bank would be more likely to accept an offer the bank might have otherwise rejected as being too low.
Now, it seems houses in Phoenix are often intentionally priced low (lower than the seller would actually accept) to create a slow-motion auction atmosphere with multiple offers, frenzied buyers, and higher sales prices. In a hot market like 2021, sellers make more money with auctions.
I wonder if the customary pricing strategy will be changed permanently in Phoenix. Or is it like short sales and REO pricing strategies during the bust – a temporary adaptation to a temporary market that will fade away as the market returns to “normal”. But it could become permanent like in Australia, Scotland, and some other countries.
Pinal County Inventory Up 50%
The number of single-family houses for sale in Maricopa County is about the same as last year at this time.
But the number of single-family houses for sale in Pinal County (Queen Creek, Maricopa, Casa Grande) is 50% higher than last year at this time.
I’m not sure what’s going on there but it does remind me of 2006 when the prices on the periphery were falling while prices were still increasing in many more central areas of the Valley, like Scottsdale. Sometimes you can see market changes on the periphery first.
iBuyers Flipping 31% To Investors
Since last July, 31% of the houses sold by iBuyers (Opendoor, OfferPad, etc.) were sold to investors, according to Mike Orr at The Cromford Report. I used to think that iBuyers were just flippers and the houses they bought would come right back on the market but it turns out that, lately, nearly 1/3rd of iBuyer house sales went directly to investors.
Tell me what you’re seeing in the market. Leave a comment or email me.
Click on graph to go to the full-size, interactive version.
This information can vary a lot in different parts of metro Phoenix. Your real estate agent can find the data for your specific city or zip code at The Cromford Report.