So here’s where things stand as of the moment in the Phoenix real estate market. There are just shy of 26,500 single-family detached homes for sale in Maricopa County. And since the start of the month there have been just over 3,500 closed sales – a far cry from the 5,000-plus months we were seeing earlier this summer and also a year ago. Those two figures mean there’s about 7.5 months of inventory here in the Phoenix real estate market, double what it had been once upon a time in 2009 and even the start of 2010.
What has changed? Not much, actually. The $8,000 homebuyer tax credit disappeared and with it buyers who had jumped off the fence seemingly jumped back on. No matter what the hoi paloi say about the recession being over, consumer confidence just doesn’t exist. Who can blame the public? My wife and I were at a local bank opening new bank accounts (the large bank which took over my old bank can kiss my tuchas on the way out) and the three of us – us and the financial advisor – were swapping stories of layoffs. Only mine was pre-2008.
Talk to people at random and you’ll learn that they’ve heard another round of foreclosures is on the way and it’s hard to explain that we’ve been hearing that same thing for the past 18 months and little has changed. Inventory’s growing but not necessarily because of the pace of homes on the market; the buyers aren’t buying as robustly as they had been. Prices trends remain variable depending on where you look in the Valley; some lower-priced areas seemingly have found a level from which to bounce. But in some of these areas I’m now seeing days on market creep past two months where two weeks used to be a stretch.
There’s also the inevitable fall slowdown working into this … the market is picking up in Phoenix’s retirement communities but elsewhere, as the kids are in school and the holidays approach, thoughts have turned away from housing. Heck, even rental inquiries are a fraction of what they have been.
So what to do? It really depends on your own situation. Waiting could benefit a buyer unless interest rates climb and then any gain on the price is going to be wiped out by the mortgage payment. Lenders may be slightly more pliable than they’ve been over the past two years, but only if their eyes on the ground are telling them what’s happening. And even then, the glorious 70 cents on the dollar your friends tell you about isn’t going to happen but anticipating the next price reduction before it happens might.
One thing seems for certain, though … the market’s not going to run up and price anyone out of buying anytime soon. Not at this sales pace.