If I seem more number-oriented than normal these days, blame the processor fan on my desktop. The processor fan broke last week which fried the motherboard which left me with only my laptop and not all of my files and I’ve been a been more than a little disconnected without my mainframe available. (It’s back, sans Microsoft Office … the next fix coming.)
In any event, taking a quick look at the numbers today shows the Phoenix real estate market sitting at 26,000 single family detached homes on the market – that’s about 37 percent off the highest levels seen over the past couple of years. Bank owned inventory now is where it was last fall, at 4,700 homes and falling. And sales … well, here are the May numbers:
- Total single family detached, Maricopa County – 6,631
- Total bank owned single family detached, Maricopa County – 4,444
Based on the April sales pace, there is less than one month of inventory of bank owned homes remaining. Much of this is due to the reduction – note, not elimination – of bank owned homes hitting the market as various lenders suspended foreclosure operations. We only saw just over 2,900 REO single family detached properties come to the market in Maricopa County – if the owners already had left or the property was investor owned, foreclosures moved forward.
Some are predicting another crushing wave of inventory now that the moratoriums are ending but the numbers don’t support the doomsday scenario, not unless you believe all buyers interested in the market already have purchased. Anything under four months of inventory is considered a sellers’ market and some – well, okay, Tobey and I – believe levels closer to 3 months would be healthy. At that level, you’d see fewer multiple offer scenarios and more buyers able to purchase the home they want rather than scurrying from listing to listing in vain without every buying. (You’d be amazed how many folks are chasing their tail right now.)
To get to that 3 month level, assuming the same sales pace, there would need to be closer to 13,000 bank owned properties active on the market – some 3,000 more than the high point we saw over the past couple of months and nearly triple what’s currently active. Put another way, even at triple the inventory we’re still looking at a sellers’ market in the bank owned arena.
And as that condition continues, lenders are not going to be as aggressive in their pricing. Basic supply and demand – when demand is such that a half-dozen offers walk in the door opening weekend, there’s no need to start the bidding low.
I’m going to leave you with one pricing chart … Phoenix itself already is showing an upswing in the median but I’d rather let you take a look at Buckeye. Buckeye’s about 50 miles west of downtown Phoenix and saw growth almost exclusively due to the concept of “drive until you qualify.” There’s at least one subdivision there that’s only half-complete with no finish in sight.
And yet, take a look at the tail end of the chart …
If the market can level off in a city like Buckeye on the fringes of the Phoenix real estate market, is it really impossible to believe that such a level can be found elsewhere in the Valley?[tags]Phoenix real estate[/tags]