Phoenix Real Estate Inventory Update - April 22, 2008
Posted on April 22nd, 2008 by Jonathan Dalton
This generally is the time when inventory in the Phoenix real estate market rises nearly as quickly as the daily high temperature. But while we were brushing against records a week ago and could hit 100 degrees as early as this weekend, the inventory of single family detached homes in Maricopa County isn’t following suit.
Phoenix real estate inventory fell to 39,271 homes as of this morning, a decrease of just under 200 homes from a week ago. And last week inventory was only 60 homes higher than the week before. In fact, there are fewer homes on the market now than in any week since the February 6 update.
Unusual? You be the judge … check out the following chart:
Last year from the beginning of February until the first week of May, inventory in the Phoenix real estate market rose 18%. This year over the same time period, we’ve seen an increase of .3%. Inventory essentially has been flat for two months.
Homes are coming on the market. Some are selling. There also appears to be a lot of inventory caught in the limbo of “pending” sales or “active with contingencies” - a special type of listing purgatory on short sales where the seller is waiting to hear back from the bank on a possible approval of the loan reduction.
All this is happening against the backdrop of increasing foreclosures - the alleged tsunami wave that was supposed to swamp the market. The foreclosures are coming in as was predicted, but the flood of inventory to follow hasn’t happened. Perhaps that is because so many sellers were attempting short sales that the homes already are in the MLS.
And once they become bank-owned homes, things change. The absorption rate for bank owned homes in Phoenix has fallen to 5.08 months, indicative of a neutral market and on the verge of becoming a sellers’ market. Short sales, meanwhile, remain at 11.7 months of inventory while the overall market is just over 12 months.
Foreclosures are taking a toll on prices as most banks are extremely aggressive in their pricing. But buyers also are discovering the banks aren’t giving these homes away for pennies on the list price. The homes are priced competitively and are selling. Activity in and of itself is what a stagnating market needs. And that’s what we have.
Queen Creek is held up as an example of a soon-to-be ghost town. Investors flocked their for low prices, homeowners moved there because that’s where they could qualify. And then someone pulled the plug. Values in some parts of Queen Creek are down as much as 50% from two years ago.
Queen Creek also has one of the Valley’s lowest absorption rates at 6.74 months.
The lesson? When home prices reach a perceived level of affordability, buyers will buy. Not every part of the Valley needs to fall as Queen Creek for that perception to become a reality, as every part of the Valley is different.
Is the market bottoming? I’m not quite ready to say that … but it does seem we’re getting closer with each passing day.
As for the rest of the Valley, click on any of the below markers for the details from any particular city or town. And as always, all data is provided by the Arizona Regional MLS and is deemed reliable but not guaranteed.
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Very nice site. It is refreshing to read a post with so many facts backed up by the numbers. You are right each part of the valley is different in it’s recovery. I work and live in the Anthem area and we are finally seeing a balanced market in some price ranges. The pendings have increased and the inventory is declining. Anthem has experienced about a 20% decline and in my opinion is about at the bottom as the buyers are making their move. When you make a purchase in Anthem you buy not just a home, but you buy a lifestyle. This is such a winning community and one of the best values in the Phoenix area.