Willie Wonka and the Phoenix Real Estate Market

Long-time readers (both of you) may remember this observation from July 2, 2009:

If you remember my old analogy about the Phoenix real estate market being like a car stuck in the mud. The accelerator’s being pushed to the floor but the tires keep spinning, unable to gain any traction. Why? The lenders are standing to the side with a water hose making even more mud. How? By continuing to price homes below current market levels in order to initiate a quick sale.

Price new homes to the market at the level of the past sales and they’ll still move. Maybe it will take 10 days instead of five, but they’ll still sell. And then you’ll see prices move …

A mere 32 months later, and the market’s gaining traction. And just as a car stuck in the mud will leap forward as soon as traction is regained before resuming a more normal path, the Phoenix real estate market,  in some of the most hardest hit areas over the past couple of years, is jumping forward.

Let’s take Laveen, just southwest of downtown …

Prices jumped forward and seemingly are settling a bit (though situations like the one my buyers found themselves in, where they were one of 15 bidders on a house the first day it came on the market and the final sales price will be above list are more common.)

Not so in Litchfield Park, at least as far as the settling is concerned:

Especially in the sub-$100k category, the pressing demand and the roadblock caused by ridiculously inventory brings to mind a different scene:

Terrible man, indeed.

What a time it is to be an equity seller. The world is your river of chocolate.

About Jonathan

Jonathan Dalton is a 30-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.

  • Another Investor

    Looking just at median price can be misleading.  Maybe the inventory of smaller, less expensive houses was depleted, and larger, more expensive houses started selling.  Median price per square foot and median square feet of houses sold are more useful tools.

  • Granted … price per square foot also is starting to shift slowly in many areas as well. The mixture of low inventory, high demand and buyers paying cash in the sub-$100k range is going to get that metric moving quickly.