There’s Nothing Left to Sell … Almost

Once upon a time, weekly market statistics were a staple here on the website. Ironically, about the time the market started moving is about when I stopped posting the numbers. I’d tell you the reason if I had one; perhaps it was the idea of shouting into the wind as the market started changing in April 2008.

If anything, I’m bringing them out today to give some numerical evidence to what I’ve been telling people for the last several months (often much to their surprise) and to ask the semi-rhetorical question at the end as I contemplate the death of the law of supply and demand.

When I say to you and to potential buyers that there’s not much for sale, here’s what I mean. (All data courtesy of the Arizona Regional MLS, data is considered accurate but not guaranteed):

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The totals vary slightly from the sub-12,000 figure I usually mention because I ran the figures for the entire MLS, which includes properties from outside Maricopa County as well as those within. (And, for that matter, Maricopa, Queen Creek and San Tan Valley all are in Pinal County.)

So if you’re trying to purchase an inexpensive home in Laveen, El Mirage or Avondale, you’re purchasing in areas where if nothing new came to the market the entire inventory theoretically would be gone before the end of January. Demand is that high.

All of this would point to prices that have to move higher, though they have spiked in the past couple of years only to retreat again. But maybe situations like this one that a buyer of mine encountered will get the needle moving.

Full price, cash offer made on a property in southwest Phoenix. Two week close. About as clean and easy as it could get. The home was priced above the comps which means financed offers were going to run into some headaches when appraisal time came around.

My buyers were outbid.

Assuming the new buyer paid cash, there now will be a comp in the $80s where most homes in the area have been in the high $60s, bringing the average price per square foot higher. And this is not the exception to the rule – it’s happening daily here.

With all that taking place, prices have to move up, don’t they?

Don’t they?

Photo credit: bixentro via Flickr Creative Commons

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.

2 Comments

  • Jim Little 6 years ago

    I don’t believe in fairy tales any more, you know, like congress or our own house of clowns are honorable.
    Now it appears I cannot believe in the oldest of economic laws either. Supply and demand seems to have lost validity.

  • Another Investor 6 years ago

    This time I think price increases are unavoidable.  There are very few foreclosures coming on the market and banks are being hard nosed about pricing on short sales.  More cash buyers are coming late to the party and rather than go home disappointed, they are upping their bids.  The financed owner-occupant is outbid almost every time and cannot go higher because of the appraisal.  That’s a lot of unsatisfied demand further pressuring prices.  If underwriters loosen appraisal requirements a little, the price increases could be significant.

    Of course, the one caveat is interest rates.  Knock a lot of buyers out with higher rates, get investors interested in alternative investments, and all bets are off.

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