You Need to Know About Micro Markets
Whether you keep your eyes on the Real Estate market like a hawk (or not), chances are you’ve at least heard some mumbling about how the Real Estate market has come back in a big way in recent years. While this may hold truth, I want you to completely forget what you think you know about the market because it’s probably wrong. The truth is, what you’ve heard on the national and local news channels is a bunch of lousy outdated averages.
So what’s wrong with averages? When it comes to selling your house, making assumptions about market conditions based off of averages of the country, state, or even your city is merely a starting point (at best). The little discussed reality is that the real estate market is made up of Micro Markets. As the 6th largest city in the US, Phoenix is no exception with hundreds of micro markets.
When evaluating a pricing and marketing strategy of your home, it’s hugely important to understand what your micro market is doing, NOT what the local news reports the state or city is doing. Recent sales information from your news stations or newspapers are typically reported quarterly, and well after a home has been sold. In other words, the news you are hearing is old! Not to mention, it’s broad and non-specific information, in a very detailed oriented market.
Your micro market can include a combination of factors such as, neighborhood, type of housing (single family, condo, etc) and price range. For example the trends of an urban penthouse in downtown Phoenix are starkly different than a small starter home in Peoria – yet the average of all types of properties are what are reported as news for our information.
But it’s not just pricing that matters in each micro market. It’s knowing the average Days on Market, it’s knowing how often price reductions are occurring, and how close sellers are getting to their asking price.
While micro markets are much deeper than just cities, by this information alone you can start to understand just how different the markets are in different areas of town.
Cities with the highest appreciation in 2016
- Arizona City (13.9%)
- El Mirage (13.7%)
- Tolleson (11.4%)
- Maricopa (10.6%)
- Laveen (10.4%)
- Buckeye (9.4%)
- Avondale (9.1%)
- Sun City (9.1%)
- Sun City West (9.0%)
- Litchfield Park (7.6%)
- Casa Grande (7.3%)
- Phoenix (7.3%)
- Queen Creek (7.2%)
Cities with least appreciation in 2016
- Gold Canyon (-0.3%)
- Scottsdale (1.4%)
- Anthem (1.6%)
- Paradise Valley (2.6%)
- Sun Lakes (3.5%)
- Fountain Hills (3.5%)
- Cave Creek (4.5%)
The takeaway – If you plan to sell your home do your homework and understand your micro market. Just because you heard the real estate market is hot, doesn’t mean your micro market is hot – it could be ice cold. The marketing plan and pricing strategy can and should be unique for each property. If you want detailed and specific information on your micro market, contact a trusted Realtor (that’s me!) to provide you with current market conditions.How Much is YOUR House Worth?