Inventory is up, but so are sales
While the active inventory of homes for sale in the Greater Phoenix Area has been on the rise since the beginning of the year, so too has the number of pending and closed monthly sales. Fortunately for home sellers, the active inventory has only risen by 7.5% since January 4, 2010, while the number of monthly sales has risen by approximately 26% in that same time…both are trends very indicative of the residential resale market in the springtime.
Supply and Demand 101
With only 5.1 months supply now, we are a far cry from the bubble-busting days of 2008, when we were averaging a 13.6 months supply. “Look how far we’ve come!” Rather than be discouraged by the active list price per square foot which has been falling since at least 2007, I am encouraged by the sold price per square foot which has been on a steady incline since spring of 2009, and you should be, too. Here’s why. I see the falling list prices as a natural by-product of home sellers becoming more realistic about current market conditions. I see the rising sales prices as the inevitable result of pent-up demand, still low interest rates, the looming expiration of the first-time home buyer and repeat buyer tax credits, and a dwindling inventory. Eventually, not tomorrow, these two numbers will converge.
In the meantime, if you’re a current homeowner needing to upgrade to a larger home, I couldn’t imagine a better time to take advantage of the real estate market. If you’d like to talk more about the conditions in your area, post a comment below or contact me.