A couple of days ago I mentioned inventory of single family detached homes in the Phoenix real estate market has fallen not just this week but over the past couple of weeks.
The following chart should give you a little clearer picture of the level of inventory over the past two-plus years:
Inventory always falls at the first of the year as listings expire. In 2007, inventory levels rose precipitously after the first of the year; the rise was far less significant in 2008.
So far in 2009, however, inventory has steadily declined outside of a one-week bump in late January. And as you can see, we’re at levels not seen in two years.
What has changed?
Efforts by lenders to slow the tide of foreclosures likely has had some impact. The bank owned market has been extremely efficient, with absorption rates hovering in the three to four month mark for the last several months (if no other homes came on the market, all bank owned homes would sell within three to four months at the current pace.)
Perhaps as important, affordability has returned to some areas of the Valley. Depending on where you’re looking a mortgage would be less expensive on a monthly basis than a rent check. And no, this doesn’t apply solely to communities in the outskirts such as Queen Creek, Buckeye or Maricopa.
As I’ve said previously, the change in inventory and increasing sales alone don’t indicate we’ve reached bottom. Prices still are under severe pressure because of the bank owned homes that are coming to the market as banks continue to be hyper-aggressive to sell their inventory.
But, as I’ve also said, we’re getting closer to the bottom than some may have you believe.[tags]Phoenix real estate[/tags]