Still waiting for the flood of bank-owned homes to hit the Phoenix real estate market?
It may be a long wait.
Right now, there are about 8,800 homes for sale in the Phoenix area, compared with 50,000 in 2008. Many people believe the low number is because banks are holding foreclosed homes off of the market in an effort to drive up Valley home prices.
Professor Michael Orr of the ASU Real Estate Studies Department doesn’t believe that.
“I actually keep a file of exactly what houses the banks own and what they’re doing with them,” he said. “When you actually count them out, it’s a relatively trivial amount that they actually own that they haven’t already listed for sale.”
In February, I wrote about the inventory falling below 11,000 homes.
In March, I wrote about the inventory falling below 9,000 homes.
In early May, I wrote about the inventory falling below 8,000 homes.
As of the moment, we’re at 7,820 single family detached homes for sale in Maricopa County. We’ve dropped below 7,500 a couple of times but haven’t been able to break lower than 7,200. And that’s a good thing.
Will those figures increase? Quite possibly, but not because of the presence of a non-existent shadow inventory.
Orr said buyers shouldn’t be worried that Valley housing prices will plummet when banks flood the market with foreclosures to sell because it’s not going to happen.
“It’s a bit like the Y2K problem,” he said. “Everyone was really was really scared about that, but when [the year 2000] came around, nothing happened.”