I was talking with another real estate agent yesterday and he told me he had six offers on a property he had listed. Since April, most of the time when we submit an offer for a buyer, the listing agent tells us there are multiple offers for the property and asks for our buyer’s highest and best offer. Other agents in our office are also seeing the same thing. We believe that the Phoenix housing market is changing. Here are a few key statistics recently released by ARMLS (Arizona Regional Multiple Listing Service).
- The number of homes sold for each of the last three months has been over 9,000. May saw 9,809 homes sold, an 8.1% increase over May of last year. This was also the second highest monthly sales figure since August of 2005.
- Total inventory of homes has dropped significantly in recent months. May inventory was at 31,661 homes, the lowest number in the past 24 months and 23.4% lower than May 2011. For comparison, inventory in November 2010 was 45,353.
- Average and median sales prices have been relatively flat over the past six months.
- A large portion of sales activity has been for properties priced under $100,000. 46% of pending contracts in May were for properties priced under $100,000. Another 22.4% were for properties priced between $100,000 and $150,000.
- Foreclosure and short sale properties continue to make up a large portion of sales and of properties still available for sale.
All of this data signals that the Phoenix market area is changing. We believe there will continue to be significant monthly decreases in the number of properties available for sale for less than $100,000. We think the lower inventory has already started to put some upward pressure on prices although it may take a while for this to show up statistically. If more listings start being added to the market in response to the demand then prices are likely to stay fairly flat. However, we think the lower inventory has already started to put some upward pressure on prices and if inventory continues to shrink we will start to see gradual increases in average prices.