Today we’ll talk about the present state of our Phoenix Metro market and how you as a seller can take full advantage of it.
For the month of July, inventory in the 85209 ZIP code was under a one-month supply. To put that into perspective, anything under three months’ worth of inventory is deemed a seller’s market. Looking at the year-over-year numbers, we had a 1.4 months’ supply this time last year and a 1.9 months’ supply in August 2017.
The normal level of active listings in the Phoenix Metro as a whole is around 29,500, but we currently have fewer than 14,000 homes for sale. This means buyers have about half as much inventory to pick from, especially in the under-$400,000 price range.
Despite the 14% drop-off in supply year over year, buyer activity remains high, and the 15.5% increase in homes under contract is evidence of that. As Mike Orr, director of Crawford Associates and former director of the Center of Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University, describes it, “The last two months have seen supply drop sharply from its already-low level, so we now have a wholly inadequate number of homes for sale to keep the market functioning normally.”
Orr also points to the fact that this past July saw the fewest listings come on our market since he started keeping records back in 2001. Interestingly enough, though, we’ve had 63% more homes on the market and the local population has grown by 50% since then. He goes on to say, “With new listings at a low ebb and closings at a high, this is the most unbalanced market we’ve seen in favor of sellers since 2005. Given the massive increase in housing stock since 2001, it’s amazing that we have fewer listings in 2019 than in 2001.” That is to say, homes are moving.
The listing success rate, which is the percentage of listings that closed versus those that expire or have a canceled contract, is currently at 97%. By comparison, the success rate was just 88% last month and 89% at this time last year.
And with lower interest rates and soaring rents, many predict that demand will continue to be high. With great freeway access, more and more shopping options, and all the new tech companies going up, our area of the Valley should continue to be a place for residents to call home.
Our rental market is also hot, so there’s a shortage of homes available for rent. Given the fact that rates are so low, some forward-thinking homeowners are becoming investors by using the equity in their current home to purchase a second home they can rent out. The combination of low inventory, low rates, high demand, and our fantastic location makes both 85209 and 85212 two great zip codes to own a home in.
If you have any questions or would like help buying or selling a home in our market, please don’t hesitate to reach out to the Klaus Team. We’d love to help you make the most informed decision for you and your family!
