It’s always interesting to try to analyze (and prognosticate) our Fountain Hills market after the 4th quarter, which is historically the lowest quarter of sales and can often bring a drop in market prices. The fourth quarter of 2013 has provided few surprises as prices remained high through the quarter but dipped a little in December (more on that later!). Inventory of residential units (403 homes & condos for sale) is up (although not drastically) over year-end 2012 inventory of 348 units.
Unit count of sales is lower in 2013 than 2012 (834 residential units sold in 2012 vs 788 units in 2013), yet the total volume of 2013 sales (includes homes, condos and lots) at $312 million is the highest rate of sales since the boom year of 2007 with $366 million. (The highest year on record was 2005 at $675 million.)
Anecdotally, we are seeing more prospective buyer interest in the last few weeks than at anytime during the past 5 years. What will be interesting to watch is how the new, higher prices will be received and whether the pace of sales can be sustained as prices continue upward….indications are that won’t be the case, yet if sales pace does sustain, we may be in for another market boom.
The dynamics of our market as prices rise is also worthy of study. Interestingly, at the end of 2012, 66% of all residential inventory was priced under $500,000. At the end of 2013, 63% is priced under $500,000, although condos make up a larger portion of that inventory today.
In this report, (specifically “Month-by-Month Analysis” on pages 8-9), we track single family homes by both price and price per square foot. While average home prices during the year tended to spike and fluctuate then end somewhat flat over last year, the price per square foot has increased much stronger than 2012. The dip in price per square foot in December is generally expected. In fact, the price dip normally comes much sooner in the quarter, suggesting that our market will be very strong going into the selling season.
Home sites also finished strong at year-end with 74 sales at an average of $173,000, the strongest price since 2009. And, the last time we saw more unit sales was in 2005, another indication that lot owners have something to look forward to!
For a copy of the entire report, contact your Sonoran Lifestyle Real Estate Associate.