EXCELLENT NEWS IN HOUSING! Sales are up, inventory is down, prices are stabilizing and buyers and sellers all across Metro Phoenix are taking notice. As Phoenix has been branded in the national media as one of the hardest-hit-cities during the housing crash, Phoenix is also gaining attention as one of the best opportunities to buy a home.
HAVE WE HIT BOTTOM YET? The bottom of a market isn’t visible while it’s at the bottom, only by looking back while the market is on the way up. Michael Orr of The Cromford Report, a well-respected information source on Valley Real Estate, called the bottom early April. While it’s still too early to clearly see when the bottom occurred (if it has), signs are indicating that he may be correct.
The first quarter of the year saw steadily decreasing median home prices each month with April as the worst so far followed by a steady rise in prices. Coupled with rising numbers of closed transactions and pending sales in the months to follow, the argument seems to lean in Michael Orr’s favor.
SELLERS HOLD THE UPPER HAND AGAIN! If you can believe it, Metro Phoenix as a whole is officially now a seller’s market. A normal market is defined as a market with a six-month supply of homes. It’s a healthy, “normal” supply vs. demand ratio. When the supply exceeds demand, as we’ve seen over the last couple of years, the absorption rate drops and the month’s supply of homes rises higher than six months – bringing us a “buyer’s market”. When the demand outweighs supply, as in a “seller’s market”, we’ll see months of supply fewer than six.
It’s important to note that the Metro Phoenix housing market is made up of a myriad of micro-markets. Statistics gleaned from Valley wide sales figures aren’t necessarily indicative of what’s occurring in one’s specific neighborhood. Broken down into smaller sections, parts of Metro Phoenix have as low as a two month supply other segments are above the six month mark.
BUYERS ARE BUYING AND HOMES ARE SELLING! At the height of the housing frenzy 10,252 homes were sold in June of 2005, making it the highest number of sales in our market’s history. After languishing at the 3,000 – 4,000 range in late 2007 and early 2008, the number of closings is once again pushing towards that record set in 2005. Homes are selling; many with scores of offers and bidding wars to boot.
First-time home buyers taking advantage if the up to $8,000 tax credit, investors, and savvy purchasers are finding the opportunity today too great to pass up. With record-low interest rates, affordable prices and an abundance of properties to choose from, many find now an excellent time to buy.
BANK-OWNED AND DISTRESSED PROPERTIES! Most of what is fueling the high sales figures in Metro Phoenix are the foreclosures and short sales. Additionally, the majority of homes being purchased are under the $150,000 price point. Again, opportunists are seeing excellent value and are clearing these properties out of the inventory.
