By definition, an absorption rate of five to six months defines a balanced market – one where inventory is balanced by the pace of sales and neither sellers nor buyers have additional leverage in negotiations.
As of this writing, there are two cities with balanced markets – Ahwatukee at 5.00 months of inventory and Maricopa with 5.63 months.
Anything less than five months (some say six but I’ve stuck with five since my very first Phoenix real estate inventory report back in July 2006) is a sellers’ market – a market where lower supply is meeting increased demand.
There currently are two cities in the Valley that are sellers’ markets – our old friend Tempe at 4.71 months of inventory (Tempe was the last city to remain a sellers’ market as the slowdown worsened) and Queen Creek at 4.39 months.
Over the past 30 days there have been 364 closed sales in Queen Creek. That is more than Scottsdale. More than Gilbert. More than Chandler. More than Surprise. More than Avondale and Goodyear combined.
In fact, the only two of the 28 cities and towns I track with more sales over the same time period are Mesa and Phoenix.
Yes, the sales in Queen Creek are REO-fueled. Bank owned homes are the dominant feature of the market in Queen Creek but the glut of REO properties also has driven prices down to a point where they’re viewed as affordable once again.
The chart above is illustrative of the trend though what it doesn’t show you is that more than half of the 364 sales were for properties that sold for $150,000 or less.
Overall in the Phoenix real estate market, sales over the preceding 30 days finally crept back above the 4,000 mark at 4,060. Inventory fell off sharply – just under 800 homes – but that’s due mostly to the 638 single-family listings that expired on May 31/June 1.
As always, all of the data is provided by the Arizona Regional MLS and is deemed reliable but not guaranteed.
[tags]Phoenix real estate, absorption rate, bank owned homes[/tags]