Days On Market by Price Range and Pending Sales for Phoenix Real Estate
The media continues to publish at every chance the woes of the housing industry; mortgage meltdown, rising foreclosures, negative equity and short sales, builders declaring bankruptcy, rising unemployment, etc. These are valid concerns and I see them taking their toll everyday. But somedays, it doesn’t feel like it. Especially when there multiple offers on short sale after just three days! Or competing with 9 other offers for a lender owned property that has been on the market for a week. It feels like 2005 again. But the typical buyer response is “But it’s a buyers market.” Or ” I just read that home prices are still going down!” I believe that the Phoenix metropolitan area median price will continue to trend downward this year, but remember it is the median calculation for an extremely large market covering many sub-markets and price ranges. Real estate is local and cannot be lumped into one all inclusive headline as the media loves to do. So let’s break it down by price range and cities.
Current Real Estate Trends in Phoenix and the east valley
To better understand what is happening, let’s look at the graphs below starting with the months of supply by price range for the Phoenix area. If 6 months is a normal supply, homes priced at $275K and below are falling into a normal market. Up to $175K, the months of supply is clearly below that of a normal market. If you are looking for a home above $500K and can get a loan, chances are you’ll enjoy a plentiful supply of single family home choices, since the supply of homes is over 1 year.
The next graph, based on the number of pending sales and broken down by city for single family homes shows how buyers are reacting to the current environment of rock bottom home prices, historically low interest rates, and goverment incentives for first time home buyers. Pending sales are those under contract that will typically close in the next 45 days. The second graph focuses on east valley cities including Gilbert, Chandler, Mesa, Scottsdale, Queen Creek and Tempe. Buyers are taking advantage of the current market. The lower the price, the more intense the competition. So listen to the media, but you’d better watch the numbers because we have some interesting things happening! While they paint the doom and gloom picture, buyers are quietly taking advantage of the market in increasing numbers.