There has been a lot of buzz and activity in the Phoenix real estate market recently. Millennials and boomerang buyers have started buying. A metric we can use to gauge if we are in a seller’s or buyer’s market is absorption rate*. The absorption rate is the rate at which homes are being sold in an area. The higher the absorption rate, the quicker homes are selling. Absorption rates above 20% are traditionally associated with a seller’s market and homes are selling fast. Well get this! In Phoenix the current absorption rate for homes up to $499,999 is 52.23%! This means if you’ve been on the fence about selling your home it is now the time to get off the fence and list (we’re happy to help!). The absorption rate for homes $500,000 – $999,999 is 23.85%; still a seller’s market, just not as hot as the lower price homes. Now here is where it gets a little interesting. The absorption rate drops to 7.98% for $1,000,000+ homes. Traditionally, absorption rates of 15% or less indicate a buyer’s market. So, if you’re looking to sell your million dollar plus home in Phoenix, be prepared for it to take longer to sell and buyers who may be playing a little more hardball when it comes to negotiations.
Take a look at the below graphs as a visual representation of this. If the bar for the number of homes sold in 30, 60, 90 days in a particular price range is above the bars for the number of active listings that shows a hot market. If the bar for active listings is higher than those for the sold bars then there is a lot of inventory, homes are sitting and buyers have the advantage.
Here is our synopsis of key numbers in the Phoenix real estate market for June 2015 (all sales analyzed were for single family detached homes):
- The median home price that sold in Phoenix in June was $217,000; this was $12,000 more than just a couple of months ago in April. The average was $271,850
- 1,639 homes sold in Phoenix in June.
- The amount of time these homes that sold in June sat on the market was an average of 65 days.
The table below outlines the key sales figures in the Phoenix Real Estate Market in June of 2015 by zip code.
| City/Zip | # of Sales | Avg Price/SqFt | Avg Sold Price | Avg List Price | Avg Days on Market | Ratio SP to LP |
| Paradise Valley | 40 | $340.87 | $2,096,213 | $2,212,796 | 127 | 94.73% |
| 85253 | 40 | $340.87 | $2,096,213 | $2,212,796 | 127 | 94.73% |
| Phoenix | 1639 | $133.92 | $271,850 | $278,196 | 65 | 97.72% |
| 85003 | 11 | $212.69 | $356,718 | $372,073 | 72 | 95.87% |
| 85006 | 17 | $156.46 | $202,247 | $200,441 | 48 | 100.90% |
| 85007 | 21 | $162.69 | $259,233 | $271,104 | 62 | 95.62% |
| 85008 | 31 | $132.59 | $203,829 | $210,013 | 72 | 97.06% |
| 85009 | 26 | $77.18 | $97,327 | $99,281 | 76 | 98.03% |
| 85012 | 14 | $218.74 | $642,647 | $677,164 | 82 | 94.90% |
| 85013 | 28 | $174.51 | $326,321 | $334,454 | 76 | 97.57% |
| 85014 | 28 | $176.88 | $276,253 | $284,868 | 73 | 96.98% |
| 85015 | 25 | $122.01 | $193,832 | $196,908 | 75 | 98.44% |
| 85016 | 38 | $194.67 | $478,468 | $505,347 | 88 | 94.68% |
| 85017 | 23 | $87.21 | $126,752 | $127,551 | 36 | 99.37% |
| 85018 | 70 | $253.45 | $679,139 | $701,322 | 78 | 96.84% |
| 85019 | 30 | $80.58 | $120,910 | $120,321 | 39 | 100.49% |
| 85020 | 49 | $156.20 | $341,259 | $356,120 | 80 | 95.83% |
| 85021 | 27 | $149.89 | $302,788 | $311,114 | 67 | 97.32% |
| 85022 | 68 | $141.21 | $288,605 | $294,501 | 72 | 98.00% |
| 85023 | 40 | $127.96 | $260,224 | $267,830 | 59 | 97.16% |
| 85024 | 50 | $136.83 | $256,893 | $261,172 | 53 | 98.36% |
| 85027 | 31 | $120.77 | $217,390 | $219,458 | 49 | 99.06% |
| 85028 | 48 | $163.85 | $407,090 | $419,737 | 102 | 96.99% |
| 85029 | 52 | $103.72 | $170,505 | $173,237 | 57 | 98.42% |
| 85031 | 26 | $74.38 | $122,361 | $123,405 | 54 | 99.15% |
| 85032 | 96 | $142.50 | $242,216 | $247,085 | 68 | 98.03% |
| 85033 | 57 | $88.66 | $126,938 | $126,539 | 56 | 100.32% |
| 85035 | 34 | $89.01 | $121,595 | $123,360 | 44 | 98.57% |
| 85037 | 59 | $93.75 | $146,374 | $147,294 | 42 | 99.38% |
| 85040 | 30 | $87.79 | $126,366 | $128,671 | 58 | 98.21% |
| 85041 | 74 | $93.21 | $168,025 | $169,730 | 70 | 99.00% |
| 85042 | 47 | $108.56 | $206,968 | $211,169 | 65 | 98.01% |
| 85043 | 37 | $89.26 | $146,983 | $147,096 | 79 | 99.92% |
| 85044 | 52 | $144.98 | $290,638 | $296,673 | 62 | 97.97% |
| 85045 | 26 | $144.27 | $360,612 | $366,427 | 96 | 98.41% |
| 85048 | 56 | $151.95 | $380,451 | $386,219 | 70 | 98.51% |
| 85050 | 81 | $162.53 | $355,321 | $362,002 | 59 | 98.15% |
| 85051 | 52 | $96.91 | $155,683 | $157,076 | 41 | 99.11% |
| 85053 | 39 | $109.77 | $174,974 | $176,391 | 31 | 99.20% |
| 85054 | 8 | $208.74 | $447,688 | $455,213 | 76 | 98.35% |
| 85083 | 41 | $133.45 | $330,704 | $337,949 | 55 | 97.86% |
| 85085 | 47 | $130.71 | $354,767 | $362,319 | 79 | 97.92% |
| 85086 | 48 | $130.60 | $342,114 | $348,890 | 92 | 98.06% |
| 85087 | 2 | $94.55 | $222,500 | $224,500 | 121 | 99.11% |
| Scottsdale | 474 | $214.55 | $655,909 | $685,495 | 99 | 95.68% |
| 85250 | 25 | $211.59 | $472,978 | $488,098 | 75 | 96.90% |
| 85251 | 28 | $231.48 | $611,675 | $638,671 | 41 | 95.77% |
| 85254 | 87 | $179.57 | $424,889 | $437,454 | 78 | 97.13% |
| 85255 | 81 | $256.03 | $1,011,196 | $1,072,865 | 116 | 94.25% |
| 85257 | 43 | $169.18 | $272,886 | $278,934 | 55 | 97.83% |
| 85258 | 36 | $229.61 | $619,664 | $637,200 | 100 | 97.25% |
| 85259 | 51 | $202.82 | $714,925 | $742,957 | 107 | 96.23% |
| 85260 | 46 | $188.92 | $493,998 | $512,093 | 82 | 96.47% |
| 85262 | 37 | $269.92 | $1,129,148 | $1,200,665 | 195 | 94.04% |
| 85266 | 40 | $225.06 | $701,800 | $726,843 | 128 | 96.55% |
| Grand Total | 2153 | $155.52 | $390,298 | $403,808 | 74 | 96.65% |
*Absorption rate is calculated by taking the number of homes sold in a month and dividing it by the number of homes active at the end of the month.
**The data analyzed is from the Arizona Regional Multiple Listing Service (ARMLS) for Metro Phoenix, Arizona. The narrative synopsis above is speaking only to single family detached homes within the city of Phoenix, Arizona.
Joe Janus & James Plotnik, real estate agents and Realtors® specializing in the buying and selling of Distinctive Arizona Homes in Metro Phoenix, Scottsdale and Paradise Valley, Arizona.
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