As of this morning, there are 8,571 detached homes for sale in Maricopa County – roughly 18 percent more than at the lows of June and roughly 7 percent more than were available just over a month ago.
Though this is August and school has started, inventory traditionally doesn’t rise in Phoenix until around Labor Day. With only 2,637 closed sales through the first 13 business days of the month, there is considerable work to be done to match either the 6,500-plus sales of last August or the 5,350 sales of July.
“It’s the shadow inventory coming into the light!” yell the doomsayers as they twist their perfectly waxed mustaches.
Except its not … of those 8,571 detached homes, only 765 are bank owned and another 60 are HUD homes (foreclosed homes purchased with an FHA loan.)
There are 329 HUD homes under contract and pending closing and another 660-odd bank owned homes listed as pending, this out of a total of 8,279 pending listings.
So, it’s remarkably safe to say, bank owned homes are not at all a factor here in Phoenix. (Argument still can come that the banks are hoarding these listings and not putting them on the market, but evidence along those lines here in Arizona, a non-judicial foreclosure state, is slim.)
“What about the short sales? Clearly distressed sales still are dominating Phoenix because that’s what the news says.”
Not quite. While there are thousands of short sales listed as pending or under contract, there are less than 1,000 active listings. To my mind, this means the short sales coming on the market still are being snapped up rather quickly; my own short sale listing attracted four offers in its first 16 hours on the market.
If the rise is not from bank owned homes or from short sales, that means people with equity (or the ability to write a check to walk away) finally are getting the message and getting off the fence.
Now it becomes a race to see who gets on the market first and, as such, the ability to stretch the market by a few percentage points is fading – more supply, similar demand generally equals falling prices; here in Phoenix, where the laws of supply and demand are regarded as strictly as freeway speed limits, it points toward flattening prices given the rise, at least unless all the buyers out there en masse decide to stop purchasing.
If you’ve been trying to purchase a place, there is a bright light on the horizon as inventory creeps up. Another three to four thousand homes and there will be something we used to call selection, and that’s a good thing.
But if you’re a seller … time isn’t running out. Far from it. But the edge of the fall is a terrible time to be on the fence, especially when your neighbors are leaping off the fence as quickly as they can.