We’ve seen a shrinking overall inventory of homes being sold around Phoenix for some time now, but the current figures are just insane! Before we dive into those numbers, let’s take a look at why this is happening:
1 – People want to live here. Whether it’s the climate, beautiful scenery, lower commute times or other reasons, there is a lot to like about the valley. We see an influx of people from all over, but California is a big one along with the upper Midwest.
2 – It’s still considered affordable. Compared to other major metropolitan areas, our housing prices are some of the lowest around, especially West of the Mississippi River.
3 – Interest Rates have been at all-time lows. With some locking in long-term rates below 3%, that’s entices many buyers to jump off the fence and into home ownership.
4 – Strong Local Economy with Job Growth. In 2008, our economy was largely tied to housing & construction. No longer is that the case. We are much more diversified with biomedical, tech, manufacturing and more. Out of state companies relocating here means more jobs, which means more people and they need places to live.
5 – New Construction Challenges. What used to take 5-6 months to build is routinely taking 8-9 months or more now. We have one client soon to close on an 11-1/2 month build! That means builders cannot keep up with the increased demand so there is a housing shortage across the board, especially in the entry level price points.
6 – People Nervous to Sell. There are plenty of people that want to move, but they are nervous to do so because the inventory is so low. They have concern over finding their next home. What if they sell, but then have nowhere to go. It can be a real challenge.
7 – Investors Holding On. As many institutional investors/hedge funds bought up properties in the 2010 era, with the rental market being so good, they have not sold off much of that inventory, which would normally be in the hands of owner occupants.
All of these factors have combined to make for very few homes on the market. Let’s dive into some real numbers & statistics:
- 21% less inventory in June 2020 versus June 2019 (yet increased buyer activity)
- Active Detached Homes in Maricopa County – 5,975
- ‘Coming Soon’ status homes – 310
- Active Homes under $300,000 – 908
- Active Homes over $1M – 1,297
- Total Homes Under Contract – 9,773
Let’s say you want a single-level home with 4+ bedrooms, 2,000+ Sq Ft, at least a triple garage, pool and built since 2000… there are only 10 available under $500,000 with the starting price about $420K.
The “pause” we had in April from COVID meant lower closing numbers for May, but May 4th the flood gates of Real Estate seemed to open right back up and June/July closing figures should be healthy.
However, without more homes hitting the market for sale, it will create further challenges in the market and continue to push prices upward.
If you’ve been contemplating a move soon, let’s chat. Every situation is unique, but we will help provide the information necessary so you can make an informed decision, best for your family.