If you read any of the other local blogs (and frankly, why would you) you may have seen a debate regarding the current state of the Phoenix market and how accurately that state is reflected in the data. What seems to get lost in the debate is the old saying, a rising tide lifts all boats.
For instance, as of right now there is only a 3.33-month supply of single family detached homes active here in the Phoenix real estate market as compared to double-digit supply at the start of the year.
Bank owned homes are the primary factor for the fall – there is about a 25-day (that’s day, as in 24 hour solar cycle, not month) supply of bank owned homes active at the current sales pace. Non-bank owned, non-short sale inventory sits at around 8.18 months.
Now, 8.18 months may not sound spectactular but it’s a far sight better than the days of 18 month to two years of non-bank owned inventory we had only a few months ago.
Again, a rising tide lifts all boats.
With fewer bank owned homes from which to choose, where will sellers look next? Toward competitively priced non-bank owned inventory. Some may sit on the sidelines until the next REO comes on the market but for someone serious about buying, they will buy as long as the price is right.
And let’s be honest … some of those bank-owned homes, especially those under $100,000, may turn out to be less of a deal once you take into account the mechanincs of supply and demand. Take a look at the figures my friend Steve Belt discovered the other day. Homes under $125,000 by and large are selling well above the asking price. Why? Because there literally are offers rolling in hours after the property hits the MLS.
I currently have a handful of buyers writing offers and sorting out the details of the home after the fact, just to make sure they at least have a home secured. If it doesn’t turn out to be what they want, we’ll cancel and move on to the next. There’s no time for them to send me an e-mail, me to go preview, send them more photos, let them sleep on it, etc. Either make the move or don’t.
Back to the debate – is saying there a 3.33-month supply of homes in the Phoenix real estate market deceptive? Not really. No more so than any other discussion of the market going back to 2005 was deceptive because some price points sold faster than others. That is a given.
But don’t think just because a home isn’t bank owned that you have forever to wait. One of my clients has been looking in Sun City Grand for two years. Last week they found just the house they wanted and wanted to see it yesterday.
It went pending the day after they e-mailed me.
Competitive priced homes will sell, bank owned or not. The buyers are there.
As always, all of the data below is from the Arizona Regional MLS and is deemed reliable but not guranteed.[table=49] [tags]Phoenix real estate, absorption rate[/tags]