Phoenix Homes are More Expensive than DC Homes...Huh?

We happened upon this article via Twitter yesterday: Phoenix Finds Its Way Out of the Downturn: A Model for Recovery, which discusses the recent turnaround in several key indicators in the Phoenix Market. Since RBI recently partnered with ARMLS (the MLS out there), it was of obvious interest. Most of the DSNews.com piece appears pretty solid - the trends described matched up relatively well with the trends we're seeing in the ARMLS data (see a few related charts at the end of this post). Their "Phoenix Metro" isn't an exact match to our "Phoenix" aggregate, so no need to nitpick if the reported stats aren't 100% identical to our figures. But then a non-MLS data source was thrown into the mix, highlighting the pitfalls of what MRIS has recently referred to as TMBI (Too Much Bad Information):

"The average price per square foot for homes in Phoenix during the first quarter of this year was $956, according to the online real estate marketplace Trulia. That’s an increase of 999.9 percent compared to the same period last year."

Wait a second...the average price per square foot for a home in Phoenix is (way) higher than any ZIP code in the DC Metro Area?? Number One on our Q1 Top 10 $/SqFt List was Georgetown (20007), which averaged only $601 per SqFt. We decided to head to the source of this $956 Phoenix figure, and sure enough, here is the Trulia chart:

Phoenix Recently Sold Homes

You can see the recent spike - along with some other anomalies in the 09-10 time period! According to another chart on Trulia's site, the average list price for homes in this market was $257,211 in the most recent time period. Bump that against the SqFt Cost Average and your average home size is somewhere south of 270 square feet. Or you can apply that $956 avg against a few different home sizes  - The average 1,000 SqFt Phoenix home would go for $956,000; a 1,500 SqFt Phoenix home would go for $1.4M; a 2,500 SqFt home - $2.4M! . If this Trulia $/SqFt metric is accurate, Phoenix has not only recovered from the downturn, they are suddenly competing with Manhattan in the premium real estate space.

We can empathize with Trulia, we know the pain caused by those pesky listings that have a home size of 1 square foot incorrectly assigned (which is why we have a thorough QC process), but here's the point - Be cautious when citing non-MLS data sources.  And if you see a 999.9% change for any average, it probably shouldn't pass the smell test!

Now, a few RBI charts supporting the idea that the Phoenix appears to be rebounding (with valid ARMLS data), even if the astronomical gain in $/SqFt turned out to be invalid...