Phoenix Real Estate Inventory Update – February 24

avatarthumbnail.jpgMy apologies for not providing an inventory update but, as at least my mother has been able to surmise, it’s been a very busy week.

I want to share with you two numbers … 2.07 and 3.61.

The first is the absorption rate for bank owned homes in the city of El Mirage, which more or less is the West Valley’s ground zero for REO properties. Of the 103 sales in El Mirage over the past 30 days, all but nine of them were of bank owned homes. It’s the bulk of what’s for sale – just over half of the homes there are foreclosures – and it’s what people are looking for.

As for the latter number, that’s the overall absorption rate for El Mirage as a whole.  As for the absorption rate for non-bank owned properties? That’s right around 20 months. Which isn’t to say it’s impossible. But it does tell you that if you’re trying to sell real estate in El Mirage, you better be priced with the foreclosures.

The pricing picture in El Mirage is pretty predictable …

Prices for EL MIRAGE

Now, here’s the flip side of life in El Mirage … rents for a basic 3 bedroom, 2 bathroom home are in the low to mid $700s. Homes can be purchased in the $60s. What does the math tell you about that situation?

Overall, inventory in the Phoenix real estate market is falling. As of a few minutes ago there are 35,085 single-family detached homes for sale in Maricopa County, down just under 800 from two weeks ago. Sales over the preceding 30 days were at 4,023, which is about 300 more than the report two weeks back.

The Phoenix real estate market’s absorption rate is 8.72 months.

In the bank owned arena, inventory in the Phoenix real estate market stands at 8,870 homes, a drop of 500 homes. And sales increased to 2,762 from 2,547 two weeks back for an absorption rate of 3.66 months of inventory.

No, we haven’t reached the bottom especially from a pricing standpoint. But let me tell you folks, we’re a lot closer to the bottom in some areas than many might think.

As always, the below table has the numbers from the various cities and towns in the Phoenix real estate market. And also as always, all data is from the Arizona Regional MLS and is deemed reliable but not guaranteed.

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[tags]Phoenix real estate, bank owned homes[/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.

  • Jerry

    Hi Johnathan,

    As always, I enjoy reading your blog. Thanks for keeping it up.

    I wanted to ask about one comment you make here. Specifically “we’re a lot closer to the bottom in some areas than many might think”. What makes you think so?

    Now don’t get me wrong – I don’t disagree, but I have a hard time supporting the feeling. I mean $50 a sq foot seems pretty stupid low, and so much below rebuilding costs. But can $35 a foot not be next? I just wonder what you feel substantiates the bottom.

    As always, thanks for writing. I read you blog thru my.yahoo.com, so I never get the music part. But I’m sure it’s good. 🙂

    Jerry

  • Hey, Jerry …

    In some respects, it’s a hunch … there are some areas that now are “stupid low” as you put it. I’m also seeing higher demand with less inventory than a year ago.

    2/19/2008: 2,022 closed sales the preceding 30 days and inventory of 39,642 single family detached homes. So we’re down 11% in inventory from the same point last year and up just shy of 50% in sales. Also keep in mind there were far, far fewer foreclosures on the market a year back.

    Just for fun – in 2007, there was less inventory – 32,610 single family detached homes – but also fewer sales at 3,126. The absorption rate at that point was 10.43.

    At 8.72 we’re still higher than I’d like to see (somewhere closer to six would be good) but we’re well off last year’s 19-plus months.

    Prices haven’t reflected the activity and probably won’t, not as long as the banks continue to be aggressive to move inventory. But the more they move, the less remains.

    As always, thanks for reading!