55% more homes were sold in 2009 than 2008 in the Greater Phoenix area through ARMLS. ARMLS is the Arizona Regional Multiple Listing service and includes single family homes, townhomes, and condos sold through real estate agents. The number of listings available for sale at the end of 2009 were 16,574 less than at the end of 2008 for a total of 40,935. This brought the number of months of inventory to 5.3, within the range of what is considered a balanced market. In fact from April 2009 through the end of the year home inventory was with the 4 to 6 months range. This resulted in a slowing of home price declines and movement towards price stabilization. Price stabilization will need to occur before home prices begin to increase.
As always with real estate, the results vary from city to city and neighborhood to neighborhood. For example, while in one neighborhood in Tempe, inventory of homes may be low, a different neighborhood in Scottsdale may have a larger percentage of homes for sale. The more homes for sale in a neighborhood, the more negotiating power the buyer has. The fewer homes for sale in a neighborhood, the more negotiating power the seller has.
The majority of home sales last year were foreclosure and short sale properties. This is likely to continue at least through the first half of the year and likely through the end of the year. The abundance of foreclosure properties will continue to hold prices at the current low levels although the lower inventory should prevent the large price declines we saw in 2009 over 2008.