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Chandler Housing Update – December and Year-in-Review

Jera Banks January 7, 2019

The median sales price in Chandler climbed nearly 11% in December, coming in at $316,031. Home sales volume was down by more than 7% with 332 units closed. The average price per square foot price was $170, however, up from $161. The average days on market for closed sales remained the same at 39.

The median sales price in Chandler rose this year by 7% to $310,000. Overall, sales volume was off by less than 1% with 5,008 homes sold in 2018. Note that the median Chandler home price is up by more than twice as much as it was during the 2nd market dip of 2011 –  from $154,000 to $310,000.

Looking over the last 10 years, a home purchased in 2009 for $189,950 would be worth $310,000 today, representing a 58% total increase in value, or average of 5.8% annually.

Homes closed for almost 98% of original asking price in December, indicating minimal negotiating room when sellers are pricing their homes at market. Buyer closing costs assistance is still being negotiated successfully.

Current active listing inventory is 560 homes (median list price of $375,500 and 54 days on the market at $176/ft), with 288 under contract to close at $305,000 and 25 days on market.  With a 1.7 month supply of homes, we are still in a seller’s market. However, it is anticipated that we will move towards a balanced market in 2019 with higher interest rates and higher home prices starting to come into play. The large gap in asking price vs. what homes are under contract for shows that many homes in the higher price ranges are not only taking longer to sell, but they are also making up a large portion of what is currently available.

BY ZIP CODE:

85224: 44 homes closed; $264,500 median sales price; $183/sq ft; 40 days on market

85225: 76 homes closed; $263,500 median sales price; $170/sq ft; 31 days on market

85226: 45 homes closed; $316,526 median sales price; $184/sq ft; 28 days on market

85286: 50 homes closed; $390,000 median sales price; $163/sq ft; 38 days on market

85248: 42 homes closed; $382,123 median sales price; $179/sq ft; 45 days on market

85249: 75 homes closed; $379,900 median sales price; $155/sq ft; 50 days on market

Given the median price of homes in Chandler now being over $300k combined with rising interest rates, we are starting to see a decline in the number of first-time homebuyers being able to purchase in Chandler. They are instead looking into more outlying suburbs like Queen Creek and Maricopa.

With the number of home sales down over the last few months compared to last year, we should continue to see a lower volume of home sales through our holiday season, which expected to continue into 2019. That being said, homes under the $350,000 mark are moving quickly. Buyers looking above this threshold are far fewer in quantity and much more discerning/particular about scouring their options before writing an offer.

With very few exceptions, appraisals are coming in to support sales prices.

Historically-attractive interest rates, healthy employment levels, and low delinquency/foreclosure rates indicate that our market is strong, although rates are expected to continue to climb in 2019, thus softening the buying pace further. Prices should climb only moderately next year, but not at the levels we saw in ’17 and ’18.

The market distress factor, which consists of short sales and foreclosures, fell from 2.2% to 1.8% of sales. Currently only 1% of Active listings fall into this category,  and a 3.1% of all homes under contract (includes homes that can take months for bank approval, and “stack up” in the pipeline as a result).

MARKET COMMENTARY: There is evidence to support that we are seeing a gradually slowing market and higher interest rates.

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