… and make no mistake, we’re entering into a much different market than we’ve seen here in the Phoenix area for the past couple of years as inventory continues to rise and sales are failing to keep pace, even if the slowing in sales is as much a seasonal effect than anything else.
Last week, there were around 14,800 detached homes for sale in Maricopa County. As of this morning, there are 15,363 (and that doesn’t even include the folks from last Wednesday’s tale, who could – and should – have had their home on the market a week ago.)
While the increase hasn’t necessarily been exponential in nature, it’s been rather steady for some time … and the inventory continues to climb.
What’s the magic number, where buyers and sellers will be on roughly even footing? Throwing out the obvious fact that the market for homes under $175,000 or so will be far different than the market for homes priced above that mark, figure 18,000. Some even will say the number’s higher.
What I see, though, is this.
There have been about 4,650 closed sales in the last 30 days. That means we’re at about 3.3 months of inventory, which still is sellers’ market territory though not quite a strong enough position where sellers should be trying to push the market higher with their list price. Results will vary by area, but market value is the way to go when listing your house – as opposed to the rest of this year, when a couple of percentage points above the last sale and/or market average was safe.
If the sales pace is the same and we’re at 18,000 homes, we’ll be at about 3.9 months of inventory; let’s just call it four, since that sales price should slow as we get deeper into what would be fall in the Valley if it still wasn’t 90 degrees out.
(Anyone else who grew up here remember freezing your tuchas off for Halloween? It’s been a long time.)
Just like NFL coaches have a little chart explaining when to go for a 2-point conversion, here’s a handy guide if you’re thinking of selling:
1) If you need to sell, get on the market as soon as possible.
2) If you want to sell but want to wait for the market to push higher, I’d say get on the market now as the downside risk looks better than the upside.
3) If you want to move up from your house to another, watch the market. Since your home likely is the less expensive of the two, the change in the market should affect the more expensive home you want more than yours and you may be able to get a better deal in the arbitrage.
4) If you’re not sure if you want to sell or not, just sit and watch for now. Maybe Congress figures out what it’s doing by the time the buyers come back in January and February and, if inventory’s not too high by then, there will be less competition even if prices haven’t changed much – could be a little higher, could be a little lower.
Once thing to keep in mind … prices don’t move quickly, barring something unusual like the 2005 bubble. Whatever happens in Congress, you’re not going to see home prices drop off a cliff in the span of a month.
Again, though, that assumes nothing extreme takes place.
Got questions about your particular situation? Call me today at 602-502-9693.
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If you’re on the fence, take a look at some of your competition …
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