A 4,400% Increase In Phoenix Valley Home Sales: Supply And Sales of Affordable Homes Skyrockets.

December 18, 2008

The rent vs. buy decision is much more compelling when a newer home can be purchased for $800 a month.

If these are not affordable homes then I just don't know which are. A newer 1,400sf home built after 2000 for less then $100,000 in a popular area of the valley with very good prospects.

Sales of homes under $100,000 went up 4,395% over last year. Yes, that is four thousand three hundred ninety five percent. Sales of homes from $100,000 to $125,000 went up 1,690% over last year.

As an example take a look at homes in Surprise for sale.

Newer Homes For Sale Under $100,000 in Surprise.

Some of these homes are ruins that need lots of work but most of them are quite nice, especially for the price. In cities like Surprise and the like they are newer and in popular neighborhoods and of course most are bank owned properties for sale.

Below is a breakdown of data for the price range up to $100,000. Some of the data for 2007 is not available because there was none: little or no homes sold in this price range and there simply where not many available.

<$100K SFR	Nov. 2008	Oct. 2008	Nov. 2007
Active	6,459	5,457	--
Pending	1,274	1,094	--
Sold	854	831	19
Active $/SF	$56.00	$59.00
Sold $/SF	$57.00	$58.00
Growth	4,395%	4,274%

(ARMLS Data Crunched by The Cromford Report)

This is one of the only price ranges (<$100,000) where the sold price per square foot is higher then the active price per square foot.

In the price range of $100-125K there are 3,790 active, 768 pending, and 500 sold in November.

Sales are high indeed, and the inventory gives buyers many choices but it's still a buyer's market. With 854 sold and 6,459 active this leaves an inventory of close to 8 months: not bad, close to balanced but in favor of the buyers.

As the price of homes increases the growth in sales increase over last year decrease. $125-150K increased by 329%: $150-175K increased by 80%: $175-200K increased by 14%: $200-$225 Decreased by 22% and the higher the price range the more likely the sales have decreased over last year.

For a home priced at $100,000 with 10% down and a loan of approximately 6% the Principal and Interest is $540 plus taxes and insurance or approximately $740.00 per month. At 7% interest the its sill only $800.00.

That the price of a decent 2 bedroom rental in Central Phoenix. Granted you will not find a newer home for less then $125,000 in Central Phoenix but Surprise in this case has good transportation a well developed infrastructure, shopping and a growing employer base.