Phoenix Inventory Declines, Part Two

avatarthumbnail.jpgA 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:

phx-inventory.jpg

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]

About Jonathan

Jonathan Dalton is a 30-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.

  • In looking around the country, areas that have declined big have really picked up. Nevada has picked up, inventory is dropping and pending sales are increasing. Our area Bergen County New Jersey, is a bit different, it went up big, but no where as much as the So.Cal, Arizona, Nevada and Florida. It went up less 80% at most from 2002 to the highs. No doubt that’s big, but I seen the other areas move in the 200-250% range.
    As money flows into the mortgage market the beginning of equalizing real estate sales is underway.