Chandler saw a decline of nearly 18% in home sales volume last month with 350 homes sales, vs November’s 428 units last year. The dip is somewhat surprising considering how strong a year Chandler has seen so far with it being the city’s hottest year on record, outside of the boom year of 2005 and bust year of 2011. However, it seems to be attributed to the fact that inventory is extremely low and there are not many choices for homebuyers, as evidenced by the barely 1.5-month supply available (3-6 month supply is considered normal).
The median home sales price was $303,500, up from $270,000, representing a stunning 12% increase in home value.
Homes closed at an average of $159/square foot vs. $150 in 2016.
The current pending home sales price for all homes under contract stands at $299,945 and $164 per square foot after just 24 days of being on the market. There are 466 homes that should close within the next 30-45 days, with available inventory of 590 listings.
We are seeing a very diverse group of homebuyers and sellers, predominantly Millennial first-time homebuyers, followed by trade-up/downsizing buyers and sellers (who are generally selling their homes and not renting them out); some investors are selling off properties they purchased after the market crash and seeing healthy profits, but not enough to keep up with the fierce demand we are seeing.
With the amount of noticeable pent-up buyer demand heading into the Winter months, the market will need more inventory to accommodate this need. The most logical place where this could come from would be investors who purchased rental properties during the market “bust” year of 2011. This, however, is unlikely, as the demand for rental homes is strong, and the long-term future of rent prices in the area are expected to increase, as well as anticipated home price appreciation. So we can expect to continue to see Chandler home price appreciation into 2018, although not at the same level we saw this year.
Distress inventory (defined as short sales, HUD homes, or foreclosures) remains at extremely low levels, with 2.3% of all closed listings fitting into this category. At present, 5.2% of homes under contract are distress, and 2.2% of active listings are either short sale or foreclosure. The higher percentage coming from the pending/under contract category should not be alarming, because with short sale listings it often takes months to obtain bank approval, so we have many in the pipeline that are stacking up on top of each other. These homes are highly unlikely to all close in the same month, thus keeping the distress levels well under 5% of total sales. We are also seeing buyers take a financially conservative approach, evidenced by the fact that many are choosing to purchase below the maximum loan amount they can quality for.
The number of home options in Chandler remains severely limited, especially in the $350,000 and under mark. Chandler remains a hyper seller’s market with multiple offers frequently showing up in the lower price ranges. We are also seeing very strong/healthy activity in the $350-500k category, as well as homes priced slightly over the half million mark.
With low inventory in place, coupled with slowing seasonal demand near the holiday season, prices are likely to increase slightly through the holiday season.
New construction homes continue to be in strong demand as well. A record number of buyers are currently the in process of building homes, with an average wait time of 7 – 9 months for completion. The amount of available land to build in Chandler continues to be absorbed, as builders focus on maximizing profits with multi-family housing and single-family homes on smaller lots. Chandler’s population currently stands around 252,000, and experts project the city’s population to top out at around 300,000 in the next couple of decades.
Although a seller’s market (multiple offers situations are not uncommon currently), buyers continue to negotiate closing cost concessions, as well as repairs during the inspection period, with offers near or at list price. Even with buyer competition, listings are not being bid well over asking price.