As anticipated in the previous issue of The Real State, supply has risen at an even faster pace over the past 4 weeks, causing the overall supply-demand index to drop more rapidly in the process. Sellers can still benefit from relatively low inventory numbers and significant appreciation in recent months, but the clock appears to be ticking on those advantages—and could finally offer relief for buyers. If the current rate of decline were to continue, the Greater Phoenix housing market could see a balanced market by the end of 2021. The cities with the largest 4-week drops in the market index are Anthem, Avondale, and Fountain Hills. At their current rates, these cities could see a balanced market by the end of September. You can read all the details in the R.O.I. Properties “Real State – Residential” newsletter (just click on the image), with additional statistics, market trends and information, but here’s a quick peek at the highlights:
Active Listings: Supply continues to rise, but at a faster rate over the past 7 weeks: up 11% over the course of April and May, and another 32% in June and July to date. The trend was consistent in price ranges between $300K and $800K, and enough to push the $400K–$500K range nearly 25% higher than last year’s week 29 supply count. Price reductions continue to respond to the increase in supply, especially between $400K-$800K, where price reductions are up from 100 per week to 422 per week. A normal weekly range is between 500–600. It’s possible some of the supply increase is a result of some homeowners coming out of forbearances, since a large portion of them expired at the end of June. However, because forbearances are not publicly recorded, it’s circumstantial. In extreme seller markets, more sellers tend to throw their hats in the ring when prices accelerate to a point where they can’t refuse.
Sales Volume & Price: Sales through the Arizona Regional MLS so far are up 18% over 2020 in the first half of 2021 and up 25% from Q2 2020. Because the country was in the throes of a pandemic during the Q2 2020, year-over-year comparisons are less useful. The second half of last year saw a massive surge in buyer activity after pandemic restrictions lifted and it remained unseasonably high until December, so comparing any sales measures to most of 2020 skews the numbers. As such, 2019 serves as a better historical comparison for how the market is performing and will most likely perform over the next few months. While 2021 came out with a bang, momentum fell sharply in March and lack of supply kept new contracts below peak season expectations in May; now 2021 is following closely in line with 2019 seasonally. It’s reasonable to expect listings under contract to gradually decline between now and December. This is happening as supply is unseasonably rising when it should be declining, thus providing buyers a smidgeon of much-needed relief. While the sales price per square foot between $250K–$400K has been rising at an average of 3.5% per month over the past 5 months, so far between June and July, it’s risen 1.2%; the overall median sales price is up just 0.1%, from $400,000 to $400,500.
Originally shared via roiproperties.com newsletter. Click here to read full newsletter.
