Today, we'd like to take a look at what's happening with real estate sales in Downtown Phoenix.
As an overview, there have been 59 sales in the downtown area (85003 & 85004) this year. As one would expect, urban type properties outsold single family homes 38 to 21 respectively. Artisan Lofts (6 sales) and Tapestry On Central (10 sales) lead the field in condo/loft sales according to ARMLS. No single family home subdivision really stood out for sales. The 59 units sold is a low number and indicates the region's real estate market is stumblingly along slowly.
As of this writing, there are 198 properties on the market with 128 of them being condo/loft type projects. There is quite a wide price range available in the downtown condo/loft market with average prices in the $500K range. The lowest priced listing sits at $279,000 while the highest, at 44 Monroe, is a whopping $4.12 Million.
The analytics graphs below gives a sense of what's going on in the 85003-4 area. (Graph on right) The green line represents the number of units sold over the past year while the black line indicates the average sales price. The February spike was the result of an $800k+ sale.
As is typical valley-wide, overall sales started plummeting last summer. This coincided with the extreme media coverage of the sub-prime mortgage crisis. As we have discussed before, it is amazing to look back and see the effect media coverage has on our lives. The good news from this graph is that the number of sales is rising, however, the prices are continuing to fall.
(Graph on left) Since the days on market (the number of days a listing is active before finding a buyer) started rising in April and is currently in the 120 day range, we believe prices will continue to fall throughout the summer. One of the things we look for in stabilizing markets is the average DOM figure to be under 100 and dropping. Ideally, we'd like to see DOM numbers in the 60-80 day range combined with stable to rising prices.
Conclusions: The downtown core is still in flux. I do believe it will stabilize by the last quarter of 2008 and show slow-steady growth in 2009. The light rail will be competed at the end of 2008, CityScape (whether you like it or not) is progressing and will be a vital business anchor, the convention center's north building will be opened next year, TGen continues to win grant projects and expanding its role, ASU's downtown expansion is still in its infancy, major hotel projects are in place like the Sheraton Phoenix, and a variety of smaller, yet vital, projects will aid in the rebound.
Gene Urban
The Urban Team
Realty Executives
