There is a variety of reasons why the Phoenix area’s average list price has been rising, especially since 2012. One, which we have mentioned in other posts here on The Phoenix Real Estate Blog before, is we have a real housing shortage caused by the decreasing number of lender owned listings. Last week, The Cromford Report pointed out another reason, which I don’t think has been talked about much yet.
Wait, what is a list price?
Before we continue talking about list prices, let’s make sure we all know what one is. A list price is the current price a seller is advertising for a property for sale, which may or may not end up being that property’s final sale price as well. Generally, as the demand for real estate in an area rises, sellers gain the confidence to try advertising higher prices, which in turn causes the average list price in that area to rise.
New MLS Listings
Now we can get back to The Cromford Report’s observation last week. As you can just barely see from the graph above, the supply of Active MLS listings has started to pick up in 2013. But even more interesting than that is the price breakdown of the listings added over the last month – they were predominantly at the higher end of the market.
According to The Cromford Report, the number of new MLS listings added over the last month that were priced below $200,000 was 25.6% less than last year, while the number of new MLS listings added over the last month that were priced at or above $200,000 was 32.7% higher than last year. So, whether you believe that demand for real estate in the Phoenix area is up or not, there are MORE houses priced above $200,000 in 2013 than there were in 2012. And that’s about as convincing of a reason for our rising average list price as I’ve ever heard.
Have you noticed if list prices are rising in your part of the Valley? If you’re not sure but would like to know, send us a message with your street address or subdivision’s name and we’ll tell you whether the average list price nearby is rising, falling, or holding steady!