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Phoenix Real Estate Inventory Update – June 2

Phoenix Real Estate Inventory Update – June 2

avatarthumbnail.jpgAbsorption rate is a wonderful gauge of the real estate market because it takes into account both inventory and sales pace.

Low inventory isn’t necessarily good on its own if there are few sales, high inventory might not be bad if there’s a brisk sales pace going on. Absorption rate is calculated by dividing the number of active listings by the number of sales. It’s just that easy. And while all statistics lie to some degree, absorption rate lies less than most.

The magic number with absorption rate is 5 to 6 months … if the absorption rate is in that range it’s a balanced market, where neither seller nor buyer has an extraordinary amount of leverage in negotiations. Below five months and it’s a sellers’ market, above six months and it’s a buyers’ market.

Taking away bank owned and short sale inventory, Phoenix remains a buyers’ market but the gap is closing fairly quickly. There currently are 13,194 single-family detached homes for sale in Maricopa County that are neither bank owned nor short sales. Over the past 30 days, there were 1,781 closed sales of such properties. The result is an absorption rate of 7.41 months, down nearly a full month from a week ago.

Say what you will about the Phoenix real estate market and such statistics … yes, there are huge differences in the sales pace in different communities and at various price points … but as a whole, the bank owned buying spree that has caused that inventory to dry up is helping traditional sellers. At least, it’s helping those sellers who are willing to price their homes to sell based on current market values.

Overall, the Phoenix real estate market’s inventory fell by about 1,100 homes this week to 22,382 single family detached homes. Some of this is due to the usual first of the month purge of expired listings – about 300 homes that fell off at midnight on June 1 were back in the system by late yesterday. There were 7,147 closed sales for an absorption rate of 3.13 months.

Bank owned homes continue to fly. There were 4,542 closed sales in the past 30 days and the current inventory is down to  3,506 homes for an absorption rate of .77 months – about 23 days. Short sales even are looking slightly better at 6.90 months.

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

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[tags]Phoenix real estate[/tags]

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