Weakening demand for Real Estate here locally may be a good or bad thing, depending on whether you are a buyer or a seller. Per the Cromford Report’s Market Summary for the beginning of June, it appears we are experiencing a natural cooling off of our marketplace as obstacles for buyers are starting to get harder to overcome. If you speak to some of our recent buyers, they would share some frustrations for sure on not being quick enough to get the house they’d hoped to get due to great competition for the “good” ones.
Per the Arizona Regional MLS, we had 9,183 sales in the Greater Phoenix this past May, which was the strongest month for sales since June 2011. 1,228 were short sales, 699 were REO sales plus an additional 192 were HUD sales (FHA REO’s) but 7,064 were normal (traditional) equity sales?!? That is the largest number of normal sales in a month since May 2006 at the height of the housing bubble!!! Leaving us with a paltry 1.7 month current supply of inventory.
Of those homes that are Active, we’re finding that a lot of them are undesirable or over-priced. Attractive homes at realistic prices are few and far between and usually last only a few days before they go under contract.
With the change of season from spring to summer this will probably change and we expect the number of active listings to start rising, peaking in late November. This is just a normal seasonal pattern.
We expect little to no increase in June and our short term outlook is for pricing to remain in a tight range around $120 per sq.ft. for the next couple of months.
We suspect that the combination of stiff competition, rising interest rates and rising prices are taking the wind out of some buyer’s sails. If this trend develops further we may end up with demand well below average in order to match the supply which is already far below average.
The chart above has stats for the City of Chandler, if you live in a different City in the Phoenix Metro area and would like to see the statistics for your city, just call or email us and we’ll be happy to provide it to you. Knowing where the market has been critical to help advise our clients of how to proceed with their Real Estate needs, short of getting a crystal ball (I’ve been on the look out for one for many years now), relying on the stats from the Cromford report is one of our best tools available to us local Realtors. For a copy of the full Report from Cromford, please click here.