It’s easy to try and draw conclusions based on what we can see in the market, such as the fact there are 16,214 detached homes for sale in Maricopa County where early in the summer there were roughly 9,000. Rising inventory only can mean prices will fall. That’s what we’ve learned from the theory of supply and demand.
Except it’s not really that simple. So many factors, both internal to the industry and external, influence the real estate market that it’s often impossible to determine what course of action to take while looking ahead into the short term.
For instance, I know inventory is rising and that it will continue to rise over at least the next six weeks because that’s what happens in the fall here in Arizona. What I feel is the inventory will drop again after the first of the year as seasonal demand picks up.
What I know is the inability of the folks in Washington to do anything construction in terms of debt ceilings, debt reductions and other fiscal matters is taking a toll on the American public’s confidence. What I feel, though, is that these bi-monthly conflicts are going to become little more than white noise to the vast majority of potential home buyers.
What I feel is retailers are nervous about what may happen this holiday season. What I know is Americans still are spending a ton of money, sometimes money they have and sometimes money they’re borrowing from credit card companies, banks, etc.
What I know is that I need a big game from Peyton Manning to win my 11th straight fantasy football contest. What I feel is it’s only a matter of time before I lose.
(Sorry, NFL.com just flashed a highlight of the team I’m playing scoring a touchdown.)
What I know is many people are waiting for prices to fall back to where they were before the appreciation of the past year. What I feel is much of that appreciation came as a result of an overcorrection of the Phoenix real estate market once the bubble burst and the home buyer tax credit expired.
What I know is the increased inventory is going to provide opportunity for FHA and VA buyers who hadn’t been able to compete with investors, cash buyers and even conventional buyers. What I feel is many of those same FHA and VA buyers don’t realize the market’s changed and aren’t looking anymore.
What I know is there’s little reason to put a home outside a retirement community on the market in the next six weeks. What I feel is many sellers, convinced by agents who only want a stick in the yard, still will put their homes on and essentially waste the first six weeks of marketing time.
Naturally, I could be wrong. It is, as I said, more art than science.
But nine years experience tends to turn that art into, well, science.