The term is being used these days for two very different scenarios – homes where the bank has foreclosed but has not put them back on the market, and homes owned by real sellers who are not underwater on their homes but are hesitant to sell until market conditions improve.
If they’re waiting for price appreciation, that still may take some time since it’s more than likely they’re waiting (in vain) to see 2005 prices come back and won’t be interested in the modest appreciation you usually see in a healthy market.
But if these sellers are waiting for the supply-demand balance to fall in their favor, we’re already here. Across much of the Phoenix real estate market, individual cities and towns are featuring such low inventory levels and high sales paces to be considered sellers’ markets even when bank owned homes and short sales are removed from the equation.
Let’s look at some of the communities where bank owned homes have been selling fast and furious, leaving the area with inventory of less than two months.
Take these REOs and short sales out of the equation in Anthem, for instance, and you are left with 55 homes for sale. Over the past 30 days there were 19 closed sales of these homes, giving the area an inventory level of 2.89 months for non-bank owned, non-short sale homes.
(In theory, inventory levels – commonly known as absorption rates – below 5 months indicate a sellers’ market.)
In El Mirage, there are 2.79 months of what I’ll call traditional inventory only because it’s easier to type than non-bank owned, non-short sale. In Maricopa, it’s 1.96 months,
But those are areas where the bubble burst hardest, you say. What about other parts of the Valley?
Okay – Peoria has 4.52 months of inventory, Glendale has 3.6, Gilbert has 3.36 and the People’s Republic of Chandler has 3.62.
In fact, the only communities with double-digit inventory levels are those which are at the highest end of the price spectrum – Scottsdale, Fountain Hills, Cave Creek and Carefree.
Below are the details for the rest of the Phoenix real estate market. Remember them the next time you hear someone dismiss the change in the Phoenix market as only applying to bank owned homes and know you’ve got better information than they do.
[tags]Phoenix real estate[/tags]