Okay, Sherman, let’s step into the Wayback Machine and take a look at the course the Phoenix real estate market has taken over the past five-plus months.
Here’s what I wrote in January after inventory plummeted 5 percent literally overnight with the expiration of nearly 2,000 active listings:
Many of these homes likely will return to the market, so the question isn’t whether the inventory will ramp back up buy how quickly it will do so.
Inventory did pick up … for about a month. Then it leveled off. And it’s been running in reverse essentially since the end of February.
Supply of single family detached homes in Maricopa County fell this week to 37,158, the ninth consecutive week in which inventory has fallen. Compare this to a year ago:
Last year, inventory climbed 20 percent from the beginning of February to the beginning of June. This year, inventory has fallen nearly 5 percent over the same time frame. This steady decline has left us with about 300 more homes on the market now than were on the market on January 1.
And this all is happening against a backdrop of increasing foreclosure rates and a rise in bank owned properties appearing on the MLS.
Last week, someone from the schaudenfrude set left a comment that it’s going to be yet another wild ride, yada yada yada. In the REO sector, at least, it feels like 2005 for all of the wrong reasons … supply is tight, demand is high and the bidding gets stupid.
Overall, though, we’re still staring at a 9-month absorption rate – significantly higher than the five to six months that would signal a “normal” balanced market. Sales of non-bank owned homes remain sluggish, unless they’re priced exceptionally well.
The market is being aided by a weakened dollar (hello, Canada) at the same time that everything else in our lives is made harder by that same weak dollar.
Recovery’s a long way off … but as a wise beagle once said, we seem to be finding the bottom one foreclosure at a time. Whether this holds up another two or three months … even the Wayback Machine won’t help us find out.
[tags]Phoenix real estate, absorption rate[/tags]