Old Republic Title | MPES

2017 WAS GREAT BUT 2018 SHOULD BE BETTER

ELLIOTT D. POLL ACK & COMPANY

2007

2008

2009

2010

Pinal Yavapai

50K

2014

2015

2016

2017

City

Aguila

HUD

87,920

87,728

75,071

Anthem

REO

93,511

99,527 91,042

Transaction Type

Apache Junction

Short

Arizona City

Normal

Arlington Avondale

Transaction Type HUD

Zip

Normal REO

85008

Price Range

85009

A. $0K to $25K

85012

12 MONTH MOVING AVERAGE SALES PRICE PER SQ. FT.

85013

C. $50K to $75K

85014

County Maricopa

D. $75K to $100K

12-Month Moving Average Sales Price per Square Foot GREATER PHOENIX - ARMLS RESIDENTIAL - MEASURED MONTHLY Greater Phoenix - ARMLS Residential Resale - Based on Calendar Month 1/1/2018 Last Update 1/9/2018 2:19:04 PM

85015

E. $100K to $125K

85016

F. $125K to $150K

G. $150K to $175K

30K

85003 85006 85007

B. $25K to $50K

40K

Black Canyon City

85004

Short

53,131

60K

2013

58,384

70K

2012

73,064

79,181

90K

80K

2011

89,222

100K

2006

82,291

2005

83,666

2004

103,178

2003

97,634

2002

H. $175K to $200K

© 2017 Cromford Associates LLC - sharing is permitted for Cromford Report subscribers only

20K

I. $200K to $250K

85017 85018

Pinal

Yavapai Year of Close Date 2000

J. $250K to $300K

2001

$150.37 K. $300K to $400K $148.69 2002 DwellingType $145.81L. $400K to $500K $149.48 2003 Condo M. $500K to $600K 2004 $142.98 $146.66 Mobile N. $600K to $800K 2005 $140.06 $143.91 SFR O. $800K to $1M

$150 10K 0K

$140

2006

$136.97 $139.28 $134.42 $132.06 $136.35 $129.52 $133.50 $127.79 $131.05 $125.38 $128.50 $122.30 $126.73 $119.70 $123.67 $118.58 $120.82 $116.06 $117.28 $113.17 $114.49

$130

$120

$110

$109.61 $105.83

Transaction Type Normal Short Sale Lender Owned HUD Sale

List Price Range A. $0K to $25K

$111.43

$107.77

B. $25K to $50K

$99.99

$100

$103.86 $98.39

$96.41 $92.80 $89.49

$90

$86.21

C. $50K to $75K

D. $75K to $100

$94.68

E. $100K to $12

$91.15

F. $125K to $15

$87.88

G. $150K to $17

$82.29 $83.33 $81.66 $80 $81.88

H. $175K to $20

February 2018

August 2017

October 2017

December 2017

April 2017

June 2017

February 2017

December 2016

August 2016

October 2016

April 2016

June 2016

February 2016

August 2015

October 2015

December 2015

April 2015

June 2015

February 2015

December 2014

August 2014

October 2014

April 2014

June 2014

February 2014

August 2013

October 2013

I. $200K to $250 December 2013

“Boomerang Buyers”, buyers returning to homeownership after suffering a short sale or foreclosure, will still be out in 2018 but this will be the last year of significant activity from this segment. The vast majority of them completed mandatory wait periods for FHA and conventional financing between 2015 and 2017, removing a major roadblock on credit reports and allowing many to

Maricopa

Mobile SFR

© 2016 Cromford Associates LLC - sharing is permitted from Cromford Report subscribers only

2001

110K

April 2013

The market continues to favor sellers, especially under $275,000.

Over 51% of newly constructed condominiums, townhomes and single family residences sold were between $275,000 and $500,000 as of November 2017. The lack of new construction in the lower price ranges has created an opportunity for flip investors looking to capitalize on demand from first-time homebuyers for move-in ready homes. There were 7,472 flip sales, categorized as those homes bought and sold within a 6-month period, year-to-date through November 2017. That is 21% over 2016 and 49% over 2014 within the same time frame, but still well below 2012’s volume of 12,771.

County

Condo

Last Update: 1/1/2018 11:16:51 PM

June 2013

SINGLE FAMILY PERMITS 10% Increase in 2018 10% Increase in 2019

Sales volume increased 6.4% from an annual rate of 87,920 to 93,511. This makes 2017 the highest year since 2011 and the fourth highest year overall for sales volume. Total dollar volume increased 14% from $24.4 billion to $27.8 billion, placing 2017 in second place overall for total money spent on residential resale transactions. 2005 was the highest year for total dollar volume at $30.9 billion.

Dwelling Type

Annual Sales Rate

Greater Phoenix - ARMLS Residential - Measured Monthly

February 2013

EMPLOYMENT 2.8% Increase in 2018 2.5% Increase in 2019

The annual median sales price gained 6.6% from $225,000 to $239,900

December 2012

RETAIL SALES 4.2% Increase in 2018 3.8% Increase in 2019

The annual average sales price increased 7.2% from $277,476 to $297,317

August 2012

POPULATION 1.8% Increase in 2018 1.8% Increase in 2019

The annual average price per square foot rose 6.4% from $141.29 to $150.37

October 2012

GREATER PHOENIX ECONOMIC SNAPSHOT

SOURCE: ELLIOTT D. POLLACK & CO., JANUARY 2018

ANNUAL SALES RATE GREATER PHOENIX - ARMLS RESIDENTIAL - MEASURED MONTHLY 1/1/2018

68,210

Taking all of this into account, we believe 2018 will be a better year for the economy overall. We expect employment to increase by an estimated 2.3% across Arizona and 2.8% in Greater Phoenix. We are expecting population to grow 1.6% this year and 1.7% growth next year for the state and slightly higher growth in Greater Phoenix. Housing should continue at a strong upward pace of roughly 10% growth per year for the next two years. And retail sales should grow by 3-4% in the short term.

For the overall market across Greater Phoenix, price trends capping off 2017 are as follows according to Arizona Regional MLS sales:

April 2012

Despite these lingering questions, it looks like the positives substantially outweigh the negatives. There is always room for caution. But, as for now, enjoy the moment and 2018.

he residential resale market in Greater Phoenix continued to strengthen in 2017 and prices are poised to continue improving faster than the rate of inflation into 2018, particularly in the lower price ranges.

June 2012

This brighter outlook comes on top of continued growth in corporate profits, the highest level of consumer optimism in 17 years, real personal income growth and growth in personal

There are still questions we have about potential problems facing the economy. Is the stock market too high? Can consumers sustain growth in spending? Will the vitriol in American politics poison the party? Will the new stimulus work?

T

Overall, the market remains healthy going into 2018. Sales prices are expected to continue rising faster than the rate of inflation below $400,000, which means buyers will be purchasing smaller homes for their money this year. Buyers between $400,000 and $1.5M will find a more balanced market with extra wiggle room for price negotiations. Higher inventory in the market over $1.5M is causing prices to decline despite a 17% increase in sales volume, good news for luxury buyers in this price point.

62,346

This stimulus comes late in the business cycle. This is the third longest recovery/expansion in U.S. history. If the expansion lasts until mid-2019, it will be the longest recovery in U.S. history. To this point, the level of economic activity this cycle has been much slower than any of its predecessors. Going forward that might change. It remains to be seen how this late cycle stimulus plays out. But, the near term outlook has become more positive.

In relative terms, the economy is running on all cylinders. And, the imbalances that usually result from this strength in economic activity are not in sight. Due to the slower than usual recovery, the normal pressures felt at this stage of the cycle are not here at the moment. Given the stimulus that will be created by the tax cuts, reductions in regulation, and infrastructure spending that is likely to take place, growth is expected to accelerate in 2018.

February 2012

Also noteworthy, the House and Senate tax bills were reconciled and finally passed tax cuts along party lines which will go into effect this year. This should stimulate the economy sufficiently to make 2018 a better year than 2017. The longer run effects should also be positive.

consumption expenditures in excess of growth in personal income. In addition, the manufacturing sector continues to expand as does construction spending.

December 2011

rizona and the U.S. economy enjoyed one of the best years in recent memory. For most of 2017, every week seemed to be yet another good week for the economy. The stock market continued to set new highs, home prices climbed, unemployment dropped, and incomes increased above inflation. We did so well that the Fed Funds interest rate increased for the third time in the year, indicating confidence that the economy is growing at an acceptable pace. In their discussion of current economic events, the Fed expects the rate of growth to modestly accelerate, inflation to stay under control, and unemployment to reach sub4% sometime in 2018.

55,229

A

August 2011

|

Supply remains extremely short for homes under $200,000, which constitutes nearly 34% of all sales in Greater Phoenix. This large market share throws some influence on overall measures for the Valley, especially when it comes to appreciation. While the overall appreciation rate for Greater Phoenix is 6.4%, it’s not uncommon to see appreciation rates soar over 8% on properties under $200,000 and drop to 3-4% annually for the nearly 51% that sell between $200,000 and $400,000. Prospects for more supply on the low end are slim these days. Existing landlords with homes in this price range have little incentive to sell profitable rentals and the reported tax incentives planned for 2018 are expected to be in their favor. Existing owner occupants with homes under $200,000, many with favorable fixed interest rates, are choosing to stay and possibly renovate instead of braving the increasingly competitive homebuying market.

October 2011

BY: ELLIOTT D. POLL ACK

reconsider owning. Remaining demand for homeownership will need to come from inbound migration and an environment that continues to favor purchasing over renting.

J. $250K to $300

K. $300K to $40

L. $400K to $500

M. $500K to $60

N. $600K to $80

O. $800K to $1M

P. $1M to $1.5M

2017 WAS GREAT BUT 2018 SHOULD BE BETTER

ELLIOTT D. POLL ACK & COMPANY

2007

2008

2009

2010

Pinal Yavapai

50K

2014

2015

2016

2017

City

Aguila

HUD

87,920

87,728

75,071

Anthem

REO

93,511

99,527 91,042

Transaction Type

Apache Junction

Short

Arizona City

Normal

Arlington Avondale

Transaction Type HUD

Zip

Normal REO

85008

Price Range

85009

A. $0K to $25K

85012

12 MONTH MOVING AVERAGE SALES PRICE PER SQ. FT.

85013

C. $50K to $75K

85014

County Maricopa

D. $75K to $100K

12-Month Moving Average Sales Price per Square Foot GREATER PHOENIX - ARMLS RESIDENTIAL - MEASURED MONTHLY Greater Phoenix - ARMLS Residential Resale - Based on Calendar Month 1/1/2018 Last Update 1/9/2018 2:19:04 PM

85015

E. $100K to $125K

85016

F. $125K to $150K

G. $150K to $175K

30K

85003 85006 85007

B. $25K to $50K

40K

Black Canyon City

85004

Short

53,131

60K

2013

58,384

70K

2012

73,064

79,181

90K

80K

2011

89,222

100K

2006

82,291

2005

83,666

2004

103,178

2003

97,634

2002

H. $175K to $200K

© 2017 Cromford Associates LLC - sharing is permitted for Cromford Report subscribers only

20K

I. $200K to $250K

85017 85018

Pinal

Yavapai Year of Close Date 2000

J. $250K to $300K

2001

$150.37 K. $300K to $400K $148.69 2002 DwellingType $145.81L. $400K to $500K $149.48 2003 Condo M. $500K to $600K 2004 $142.98 $146.66 Mobile N. $600K to $800K 2005 $140.06 $143.91 SFR O. $800K to $1M

$150 10K 0K

$140

2006

$136.97 $139.28 $134.42 $132.06 $136.35 $129.52 $133.50 $127.79 $131.05 $125.38 $128.50 $122.30 $126.73 $119.70 $123.67 $118.58 $120.82 $116.06 $117.28 $113.17 $114.49

$130

$120

$110

$109.61 $105.83

Transaction Type Normal Short Sale Lender Owned HUD Sale

List Price Range A. $0K to $25K

$111.43

$107.77

B. $25K to $50K

$99.99

$100

$103.86 $98.39

$96.41 $92.80 $89.49

$90

$86.21

C. $50K to $75K

D. $75K to $100

$94.68

E. $100K to $12

$91.15

F. $125K to $15

$87.88

G. $150K to $17

$82.29 $83.33 $81.66 $80 $81.88

H. $175K to $20

February 2018

August 2017

October 2017

December 2017

April 2017

June 2017

February 2017

December 2016

August 2016

October 2016

April 2016

June 2016

February 2016

August 2015

October 2015

December 2015

April 2015

June 2015

February 2015

December 2014

August 2014

October 2014

April 2014

June 2014

February 2014

August 2013

October 2013

I. $200K to $250 December 2013

“Boomerang Buyers”, buyers returning to homeownership after suffering a short sale or foreclosure, will still be out in 2018 but this will be the last year of significant activity from this segment. The vast majority of them completed mandatory wait periods for FHA and conventional financing between 2015 and 2017, removing a major roadblock on credit reports and allowing many to

Maricopa

Mobile SFR

© 2016 Cromford Associates LLC - sharing is permitted from Cromford Report subscribers only

2001

110K

April 2013

The market continues to favor sellers, especially under $275,000.

Over 51% of newly constructed condominiums, townhomes and single family residences sold were between $275,000 and $500,000 as of November 2017. The lack of new construction in the lower price ranges has created an opportunity for flip investors looking to capitalize on demand from first-time homebuyers for move-in ready homes. There were 7,472 flip sales, categorized as those homes bought and sold within a 6-month period, year-to-date through November 2017. That is 21% over 2016 and 49% over 2014 within the same time frame, but still well below 2012’s volume of 12,771.

County

Condo

Last Update: 1/1/2018 11:16:51 PM

June 2013

SINGLE FAMILY PERMITS 10% Increase in 2018 10% Increase in 2019

Sales volume increased 6.4% from an annual rate of 87,920 to 93,511. This makes 2017 the highest year since 2011 and the fourth highest year overall for sales volume. Total dollar volume increased 14% from $24.4 billion to $27.8 billion, placing 2017 in second place overall for total money spent on residential resale transactions. 2005 was the highest year for total dollar volume at $30.9 billion.

Dwelling Type

Annual Sales Rate

Greater Phoenix - ARMLS Residential - Measured Monthly

February 2013

EMPLOYMENT 2.8% Increase in 2018 2.5% Increase in 2019

The annual median sales price gained 6.6% from $225,000 to $239,900

December 2012

RETAIL SALES 4.2% Increase in 2018 3.8% Increase in 2019

The annual average sales price increased 7.2% from $277,476 to $297,317

August 2012

POPULATION 1.8% Increase in 2018 1.8% Increase in 2019

The annual average price per square foot rose 6.4% from $141.29 to $150.37

October 2012

GREATER PHOENIX ECONOMIC SNAPSHOT

SOURCE: ELLIOTT D. POLLACK & CO., JANUARY 2018

ANNUAL SALES RATE GREATER PHOENIX - ARMLS RESIDENTIAL - MEASURED MONTHLY 1/1/2018

68,210

Taking all of this into account, we believe 2018 will be a better year for the economy overall. We expect employment to increase by an estimated 2.3% across Arizona and 2.8% in Greater Phoenix. We are expecting population to grow 1.6% this year and 1.7% growth next year for the state and slightly higher growth in Greater Phoenix. Housing should continue at a strong upward pace of roughly 10% growth per year for the next two years. And retail sales should grow by 3-4% in the short term.

For the overall market across Greater Phoenix, price trends capping off 2017 are as follows according to Arizona Regional MLS sales:

April 2012

Despite these lingering questions, it looks like the positives substantially outweigh the negatives. There is always room for caution. But, as for now, enjoy the moment and 2018.

he residential resale market in Greater Phoenix continued to strengthen in 2017 and prices are poised to continue improving faster than the rate of inflation into 2018, particularly in the lower price ranges.

June 2012

This brighter outlook comes on top of continued growth in corporate profits, the highest level of consumer optimism in 17 years, real personal income growth and growth in personal

There are still questions we have about potential problems facing the economy. Is the stock market too high? Can consumers sustain growth in spending? Will the vitriol in American politics poison the party? Will the new stimulus work?

T

Overall, the market remains healthy going into 2018. Sales prices are expected to continue rising faster than the rate of inflation below $400,000, which means buyers will be purchasing smaller homes for their money this year. Buyers between $400,000 and $1.5M will find a more balanced market with extra wiggle room for price negotiations. Higher inventory in the market over $1.5M is causing prices to decline despite a 17% increase in sales volume, good news for luxury buyers in this price point.

62,346

This stimulus comes late in the business cycle. This is the third longest recovery/expansion in U.S. history. If the expansion lasts until mid-2019, it will be the longest recovery in U.S. history. To this point, the level of economic activity this cycle has been much slower than any of its predecessors. Going forward that might change. It remains to be seen how this late cycle stimulus plays out. But, the near term outlook has become more positive.

In relative terms, the economy is running on all cylinders. And, the imbalances that usually result from this strength in economic activity are not in sight. Due to the slower than usual recovery, the normal pressures felt at this stage of the cycle are not here at the moment. Given the stimulus that will be created by the tax cuts, reductions in regulation, and infrastructure spending that is likely to take place, growth is expected to accelerate in 2018.

February 2012

Also noteworthy, the House and Senate tax bills were reconciled and finally passed tax cuts along party lines which will go into effect this year. This should stimulate the economy sufficiently to make 2018 a better year than 2017. The longer run effects should also be positive.

consumption expenditures in excess of growth in personal income. In addition, the manufacturing sector continues to expand as does construction spending.

December 2011

rizona and the U.S. economy enjoyed one of the best years in recent memory. For most of 2017, every week seemed to be yet another good week for the economy. The stock market continued to set new highs, home prices climbed, unemployment dropped, and incomes increased above inflation. We did so well that the Fed Funds interest rate increased for the third time in the year, indicating confidence that the economy is growing at an acceptable pace. In their discussion of current economic events, the Fed expects the rate of growth to modestly accelerate, inflation to stay under control, and unemployment to reach sub4% sometime in 2018.

55,229

A

August 2011

|

Supply remains extremely short for homes under $200,000, which constitutes nearly 34% of all sales in Greater Phoenix. This large market share throws some influence on overall measures for the Valley, especially when it comes to appreciation. While the overall appreciation rate for Greater Phoenix is 6.4%, it’s not uncommon to see appreciation rates soar over 8% on properties under $200,000 and drop to 3-4% annually for the nearly 51% that sell between $200,000 and $400,000. Prospects for more supply on the low end are slim these days. Existing landlords with homes in this price range have little incentive to sell profitable rentals and the reported tax incentives planned for 2018 are expected to be in their favor. Existing owner occupants with homes under $200,000, many with favorable fixed interest rates, are choosing to stay and possibly renovate instead of braving the increasingly competitive homebuying market.

October 2011

BY: ELLIOTT D. POLL ACK

reconsider owning. Remaining demand for homeownership will need to come from inbound migration and an environment that continues to favor purchasing over renting.

J. $250K to $300

K. $300K to $40

L. $400K to $500

M. $500K to $60

N. $600K to $80

O. $800K to $1M

P. $1M to $1.5M

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