2019 Mid Year Phoenix Real Estate Recap

By June 21, 2019 Blog
The Mid Year Recap for real estate investors using hard money loans for real estate

6 Months have passed so far for the real estate market in Phoenix, and it has been a great year for those using hard money loans for real estate.

While the Government shutdown did slow down a lot of real estate activity, but the good news, especially for those who used hard money loans for real estate,  the market has sped up in just the past few months, leaving many real estate investors wondering in a new bubble is right around the corner.

Many still are wondering what markets have improved in the past few months, when to use hard money loans for real estate, and where they should be looking to invest, and if the threats of buyers are a welcome friend or foe!

We break down the markets on the rise, ibuyer activity, the state of the market, and hard money loans in phoenix below.

Markets On The Rise

The Cromford Report States, Compared to last years numbers, that the Phoenix market continues to rise, favoring sellers over buyers. The Top Rising Sales Markets In Phoenix Were:

  1. Central & Northern unit sales were up 6.0% from April 2018
  2. West Valley unit sales were up 5.8% from April 2018
  3. Southeast Valley unit sales were up 3.4% from April 2018

However, not all markets performed the same, and we can see that these markets did not rise.

  1. Northeast Valley unit sales were down 2.6% from April 2018
  2. Pinal County unit sales were down 12% from April 2018

Both of these market changes are great new for Phoenix Real Estate investors, especially those using hard money loans for real estate, showing areas for buying new homes, and even showing great options for rentals to come up in the markets where there are shortages.

Rising Markets For Investors

For Investors looking to take advantage of the rising appreciation rates, they don’t have to look any further than the following:

  1. Queen Creek 10.7%
  2. Maricopa 9.0%
  3. Buckeye 8.8%
  4. Mesa 8.2%
  5. Tempe 7.8%

We Turned to Trulia to get the details on each of these mini-markets for those using hard money loans for real estate.

  • Queen Creek show a 8% year-over-year rise in median sales price and a 1% rise in median rent per month.  With a $364,950 Median Sales Price, $152 Price Per Sqft, $1,512 Median Rent Per Month Queen Creek boasts the highest sales price of the top 5.
  • Trends in Maricopa show a 9% year-over-year rise in median sales price and a 4% rise in median rent per month. WIth an average of $210,000 sale price, $110 price per SQFT.and a median rent per month of $1,299, Maricop shows the highest rise in year to year sales!
  • Trends in Buckeye show a 4% year-over-year rise in median sales price and a 1% rise in median rent per month. $235,000 median sales price, $131 Price Per Sqft, $1,395 Median Rent Per Month.
  • Trends in Mesa show a 1% year-over-year rise in median sales price and a 3% rise in median rent per month. With a $247,842 Median Sales Price, $159 Price Per Sqft, $1,550 Median Rent Per Month.
  • Trends in Tempe show a 5% year-over-year rise in median sales price and a 3% rise in median rent per month. With a $295,000 Median Sales Price, $182 Price Per Sqft, and $1,850 Median Rent Per Month.
  • Tempe has the largest median rental price of the group, and leaves plenty of room for an investor to make a high return with a rental property using hard money loans for real estate.

 

Is Real Estate Being Taken Over by Ibuyers?

iBuyer activity, such as homes purchased, sold by online wholesalers, such as opendoor, offerpad, and Zillow are still performing strongly. Real Estate Investors, are still interested in how this rise in virtual real estate will affect the market and hard money loans for real estate.

According to the Cromford report, iBuyers sold slightly more homes than they purchased in May.

Overall growth looks strong relative to 12 months ago, but there has been little change over the past several months although May’s total of 340 purchases sets a new record for them.

iBuyer purchase activity has been steady over the past 3 months while overall market activity has increased. Meaning with the increased activity hasn’t lead to a iBuyer takeover … yet.

Market share of iBuyer purchases is approximately 5% for May, having peaked at almost 7% last December. Sales activity is also around 5% having peaked at just over 6% in March.

 

Opendoor OfferPad Zillow All iBuyers Combined
Homes Purchased in May 2019 340 100 101 541
Homes Purchased in May 2018 283 125 3 411
Annual Change in purchases +20% -20% +3267% +32%
Homes Sold in May 2019 322 111 119 552
Homes Sold in May 2018 260 89 0 349
Annual Change in Sales +24% +25% N/A +58%
Median Purchase Price in May 2019 $242,650 $233,356 $290,000 $245,251
Median Purchase Price in May 2018 $212,000 $228,600 $312,000 $231,000
Median Sale Price in May 2019 $249,000 $239,900 $300,000 $255,000
Median Sale Price in May 2018 $242,500 $240,000 N/A $240,000
Homes in Inventory at the End of May 961 432 386 1,779

Virtual Real Estate Services

Virtual Real estate might not be that far off for hard money loans for real estate!

The Wall Street Journal Reports investors are changing the $26 trillion market for U.S. residential real estate, starting in Arizona’s capital—the petri dish for America’s housing experiments.

A computer can tell Ibuyers,, what to offer and how much to ask. Investor purchases of U.S. homes have climbed to an all-time high, according to data released today by CoreLogic.

Other Virtual services are starting to swarm the market as well, from showing, staging, and virtual tours, Realtors are looking more into this service to fit more complicated demands of buyers.

 

Virtual services aren’t just available for Realtors. In fact more Real estate investors, house flippers are turning to hard money loans for real estate to service and fund their flips.

House Flippers looking to make the most of real estate investments find that virtual applications take the guesswork out of funding their flips.

It’s easy to see why, wth short application and approvals within hours of funding, house flippers can get hard money loans for real estate funding answers faster than with other options.

The Real Estate Bubble, Myth Or Matter Of Time?

Everyone can agree that the housing market is performing at higher levels than ever before. As the market continues to improve the word housing bubble gets thrown around.

Is there a threat of another crash in Ariona and phoenix?

The answer, depending on who you ask you will either hear a fearful yes or a resounding no.

The Cromford states that the market today is stronger than 12 months ago.

Those measurements that indicate this include:

  • The Cromford® Market Index is 161.5 – up from 160.0
  • The Contract Ratio is 77.6 – up from 71.7
  • Average sales price as a percentage of list is 98.02% – up from 97.82%
  • Active listings excluding UCB & CCBS number 16,003 – down from 16,213
  • Sales per month is 9,626 – up from 9,534
  • Days on market for active listings is 95 – down from 97
  • Market Distress Index is 1.4 – down from 2.0
  • This weeks sales as percentage of long term average is 120.8% – up from 107.3%

With such strong activity, it is looking like the market will continue to outperform. However, even the cromford report states “The recovery is complete, so where do we go from here? We shall have to watch closely to find out.”

Where is the Maret Heading?

ARMLS even reports a record breaking month this past May. New all-time records were established for both sales volume and total dollar volumes, as well as the most homes sold and for the most money. Total dollar volume was $3,593,145,906. The monthly median sales price also set a record high reaching $278,000.

However, even with such a strong performance many people aren’t quite sure what to think of all this activity.

With the housing crash a painful memory haunting the memories of all the veteran real estate investors, especially those who used hard money loans for real estate, it makes sense why some are so cautious. You can even read more about the housing bubble data here.

Cromford Report even states a few key indicators that are ringing some alarm bells,even though these tend to be the long term non-volatile measurements.

  • Days Inventory 82 versus 79
  • Listing Success Rate – 83.2% versus 83.6%
  • Days on Market for Monthly Sales – 65 versus 61
  • Prices are higher by 5 to 7% and dollar volume is at record levels.

Even after the first week of June Completed, we can see that Phoenix is favoring sellers still, especially those using hard money loans for real estate.

Closed listings are very strong, Up from 3,540 last year to 4,019 across Greater Phoenix, which is an increase of 13.5%

It would seem that despite all the talk of a bubble, the market still continues to perform strongly.

Summary

Real estate investors using hard money loans for real estate should start looking for properties in the Northern and Western Parts of phoenix as the resale value of these areas are high.

Ibuyers are selling more homes the buying, but their market share is increasing, as the convenience of these services is unparalleled. How these services will impact the market long-term is still out.

Despite a slow burn at the beginning of the year, the market is performing well and even breaking records this year. There is a lot of talk of a bubble, but as of right now there are no clear indications that the market is facing that anytime soon.

More than ever, house flippers are using hard money loans for real estate to purchase, flip, and sell properties all over phoenix. Prime Plus Mortgages makes it so easy to flip a homes with less down than ever before. It’s So Easy to get approved with  our online application, and we guarantee a response in 12 hours or less.

Apply Here.

 

Prime Plus Mortgages

Prime Plus Mortgages

Prime Plus Mortgages is a licensed hard money lending company. We specialize in hard money loans, or HMLs, for developers, property flippers and buy-and-hold strategists. HML programs make private money available for small to medium scale projects.

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