By Mike Bodeen · 3 October 2022
The number of active residential listings in “The Valley,” which we could define mostly as the Phoenix Metro communities, has surpassed 20,000 for the first time since 2017. This number is nearing, but still below our more long term average of about 25,000.
Though our supply shortage has ceased, there are some “single family detached” price ranges that have higher supply numbers than average. For example:
Homes priced from $350,000 to $400,000 have 2,082 active listings which is a 3.3-month supply at the current sales rate. This is the highest count since January 2008.
Homes priced from $400,000 to $500,000 have 4,456 active listings which is a 3.8-month supply at the current sales rate. This is the highest count the valley has ever seen.
Homes priced from $500,000 to $600,000 have 2,510 active listings which is a 3.7-month supply at the current sales rate. This is the highest count since December 2007
Though these supply numbers are high compared to the last several years, they are still below average from a long-term perspective. This is great news for buyers who are looking in these price ranges, which is the bulk of the market. Per Cromford, the $400,000 to $500,000 price range is the “new normal” which is where most of our current buyers are looking.
As you can see from the above historical chart (past 21 years) 4-6 months of supply is closest to normal. We are still below that but trending north. 2007 of the Great Recession, was the terrible top of the supply market with over 20 months of supply.
Seeing the quick drop in our market has been a shock to many local and national Realtors and mortgage loan folks. Most licensees were not working in local real estate 14 years ago so they have no baseline, and little understanding of navigating changing markets. For us, change is as common as Arizona sunshine.
Speaking of mortgage lenders, a number of lenders are getting very creative in their loan programs regarding interest rate buy-downs, adjustable rates, etc. We reiterate, if one can qualify for a loan, this may be the best time for them to consider jumping into the market before rates subside which will increase the surge of buyers (i.e., competition), especially in the aforementioned price ranges.
If you’re not working with an excellent lender, give us a shout – we have them.
Market data referenced in this article comes from The Cromford Report.