By Mike Bodeen · 24 July 2017
(Hint – It’s Not the Appraiser)
We often share with our clients that appraisers do not determine a home’s value. Neither do sellers or Realtors for that matter. Sellers, appraisers and Realtors (and yes, your next-door neighbor) can give an opinion of value, but it’s only that – someone’s opinion. An appraisal is that person’s opinion of value. Period.
Buyers however, do determine value. Buyers call the shots. If there are no buyers, there is no value. If there are a lot of buyers outweighing demand for something, values rise. It’s called supply and demand. Real estate values rise and fall according to these words.
In 2007, when the beginning of our market began crumbling, we had 58,000 listings on the market at the peak. Today we have under 20,000 if you’re not counting homes already under contract. Phoenix Metro communities have been on a consistent rise in home values since 2011 when demand began increasing, and supply began dropping. And it’s no accident that values bottomed out at the same time.
Supply is a pretty accurate gauge to the direction of our market. In the following chart, we provide you with numbers from the Cromford Report showing how our supply side fared this past year.
City / 2016 Months of Supply / 2017 Months of Supply / Supply vs Last Year
Sun City and Sun City West — 1.4 — 1.0 — Large Reduction
El Mirage and Youngtown — 0.9 — 1.0 — Higher
Avondale — 1.0 — 1.1 — Higher
North Chandler — 1.3 — 1.2 — Reduction
South Glendale — 1.6 — 1.2 — Large Reduction
Tempe — 2.0 — 1.4 — Large Reduction
I-17/101 — 1.5 — 1.4 — Reduction
South and SW Phoenix — 1.5 — 1.6 — Slightly Higher
Apache Junction — 2.7 — 1.7 — Large Reduction
Queen Creek — 2.2 — 1.7 — Large Reduction
South Scottsdale — 2.6 — 2.1 — Large Reduction
Florence and Coolidge — 4.9 — 2.2 — Huge Reduction
Buckeye — 2.3 — 2.4 — Slightly Higher
Central Scottsdale — 3.2 — 2.4 — Huge Reduction
North Phoenix — 2.4 — 2.5 — Slightly Higher
Ahwatuckee — 2.2 — 2.6 — Higher
Anthem & New River — 4.0 — 2.6 — Huge Reduction
Biltmore & Arcadia — 3.3 — 2.9 — Huge Reduction
Cave Creek & Carefree — 5.4 — 4.0 — Huge Reduction
North Scottsdale — 6.5 — 5.5 — Huge Reduction
Fountain Hills & Rio Verde — 4.4 — 6.2 — Much Higher
Paradise Valley — 13.9 — 7.5 — Huge Reduction
Wickenburg — 10.9 — 9.2 — Reduction
Of the 49 towns reviewed in the Cromford Report in the Phoenix Metro area, 35 decreased inventory from one year ago, while 12 increased inventory and two remained the same.
– Mike
Market data referenced in this article comes from The Cromford Report.