Definitions of the meaning of absorption rate vary slightly from place to place. As a general rule of thumb, though, an absorption rate of less than five months – said another way, inventory of less than five months – would indicate a sellers’ market, inventory between five and six months indicates a balanced market and anything over six months is a buyers’ market.
As we enter the final two weeks of spring training, the Phoenix real estate market is moving closer to becoming bvalanaced. As of this morning there were 33,891 active single-family detached homes for sale in Maricopa County and 5,044 closed sales over the preceding 30 days. That adds up to an absorption rate of 6.72 months, down nearly a full month from a week ago.
The bank owned arena has gained momentum at an even more stark pace – 3,479 closed sales over the past 30 days against 8,474 active listings for an absorption rate of just 2.5 months. Add this as further evidence that the City of Phoenix’s incentive to purchase bank owned homes, while admirable, is aiding the wrong sector of the market.
None of this is to say the glory days of 2005 are here again, where sellers can toss comps out the window and sell at whatever price they choose. No, homes need to be priced at or near the same levels as the bank owned homes if there’s to be any chance of moving the property. But if a home is well priced, it will sell … the buyers are there.
Four communities in the Phoenix real estate market are sellers’ markets right now – Anthem, El Mirage, Maricopa and Queen Creek. Another eight fall into the balanced range – Avondale, Buckeye, Glendale, Goodyear, Laveen, Phoenix, Surprise and Tolleson.
This probably would be a good time to give the standard disclaimer … while I don’t believe we’re at the bottom, I can assure you that we won’t know the bottom has hit until we’re long past the depths.
As always, details from the various cities and towns in Maricopa County follow. And also as always, all data is provided by the Arizona Regional MLS and is deemed reliable but not guaranteed.
[tags]Phoenix real estate[/tags]