Contracts Up 19% between $250-600K
Rehab Sales Rebound
New listings activated in June were down 10.0% compared to last June and overall supply has dropped 9.5% in 4 weeks, putting it below last year’s count for the first time all year. Buyers have gotten used to very little supply under $200K but now they’re feeling it hard between $200K-$250K, where new listings were down a whopping 15.1%. Trying to fill the gap, brand new townhome/condo sales have been strongest between $200K-$250K with a median size of 1,362sf. The top two builders that have sold the highest number of condos in this price range this year are Lennar in Gilbert and DR Horton in Mesa. Other competing developers building condos between $200K-$250K include Bela Flor in Mesa and Maracay in Goodyear. In Mesa, new condos in this price range have been extremely competitive with resale with an average price per square foot of $155.70 versus $157.47 for resale.
Listings in escrow are up 7.4% and have soared nearly 19% over last year between $250K and $600K. Homeowners with property valued under $250K are inundated with offers from investors as rehab sales have rebounded strongly over the past few months. Making up for lost time after being down 4.2% in the first quarter, successful flip sales have now outperformed 2018 by 4.8%. The median sale price for a flipped home in May was $245K, up 8.4%, and the average size sold was 1,710sf. The median gross gain for a traditional flip investor was $53K between their acquisition and sale price. iBuyer companies such as OpenDoor, OfferPad and Zillow showed a median gross gain of just $9,900, however that doesn’t account for significant service charges to the sellers during escrow. What does this mean to you?
- The data above reveals the fallacy of the iBuyer proposition: iBuyer’s make very little on the difference between what they pay and what they sell for. They make their money on the “significant service charges” they tack on to the sale once in escrow. These charges typically represent anywhere from 20-30% and basically amount to equity stripping from the Seller.
- Rehab/Flip projects are back in a big way! This is good news for us and you. As many of you know we partner with many clients on investment projects, and the above data correlates with what we are seeing on the ground. If you have an interest in doing a rehab project with us you can learn more here.
- Are you what we call an “Accidental Landlord?” Turn that rental you really don’t want into a rehab project and put cash in your pocket. Call us today and we can handle everything from rehab to sale!
- Buyer’s at price points above >$250K are very active in the market. If you have a home in this price range this is great news! Give us a call today to learn more about leveraging this market dynamic.
Contact the real estate experts at NextHome Valleywide in Chandler, AZ at 480-621-6828 for more information. If you are currently looking to Buy or Sell a home in the Phoenix metro , Scottsdale or East Valley area and are not sure where to turn we can help! Search for homes at Valleywide.realestate where you can find single family homes, golf and lakefront properties, 55+ communities, townhomes and much more. Visit our blog at NextHome Valleywide for a monthly Phoenix Market Update.