In our ongoing effort to post consistent and timely Phoenix housing market updates, here below is a Concise Market Snapshot from The Cromford Report, and my own short commentary afterward. For a frame of reference on this month’s numbers, you may want to take a quick look at last month’s housing market update, “Phoenix Housing Market Update – July 2, 2013.”
Average Home Sales Price
Although the chart above shows that the average home sale price declined from $239,683 on July 14, 2013 to $238,903 this week, $238,903 is actually higher than the average home sale price of $236,436 reported on last month’s market update on July 2, 2013. I’m not pointing this out because I believe I’ve uncovered the secret to timing the real estate market, but rather to highlight the fact that averages can be skewed up and down very easily over the short-term. Looking back a year from now, a slide from $239,683 to $238,903 will hardly even look like a slide. So please, be careful not to trust every article you read about a sudden downturn or a sudden shift in the Phoenix housing market. In my opinion, it takes 12 – 15 months to even begin to identify a lasting trend in any real estate market.
Number of Houses for Sale
Now that the number of Active Listings is finally rising again, you might think the increase in supply would translate into an increase in sales per month. Since, however, we are in the midst of the Phoenix area’s slowest real estate season (approximately July through September), the number of sales per month is currently declining. This isn’t exactly ideal for home sellers, but it should be welcome news to home buyers who have been waiting for a more balanced market and a more level playing field.
Have you heard the popular rumor that “institutional investors” have acquired a large inventory of Phoenix area houses which, if sold all at once, would throw the Phoenix housing market back into a recession? Here are three reasons Mike Orr of The Cromford Report gave to explain why this scenario is an exaggeration and not likely.
1. The latest total number of institutional-owned single family homes in Maricopa and Pinal Counties is around 12,500. This represents just over 1.1% of the total inventory of single family homes in the two counties combined.
2. The entire inventory of institutional-owned homes represents about 42 days of supply, based on our current annual sales rate. This would not be enough to create an over-supply situation. If anything, it would help correct the current under-supply woes.
3. Compared with the 200,000 lender-owned homes the Greater Phoenix Area has already absorbed, a total of 12,500 institutional-owned homes is fairly insignificant. And, almost all of them would fall into our lowest price ranges, which is where the under-supply of houses for sale is the most extreme.
What do you think about this month’s newest trends? Tell me in a comment below!
**If you would like a chart, similar to the one above, prepared for your own city or zip code within the Greater Phoenix Area, just post a comment below, send us a message on our Contact Us page, or give us a call the old fashioned way! We would love to hear from you.**
Source: The Cromford Report