Market Analysis for May 2009

I’m going to say this once, so you’d better listen carefully. There are 33,621 homes available for sale in Phoenix metro today. 33,621!!! Ok, I lied, I didn’t say it once, but what do you expect? This is the lowest we’ve had since…well…our last real estate boom! To appreciate the craziness of this, imagine that we are getting flooded with thousands and thousands of foreclosures every month. On top of that, we had months and months of speculation that the market is plummeting. Even today, many people still ask whether we are at the bottom. Well, if we’re not at the bottom, we’re pretty darn near it! Just this time last year, there were 47,033 homes available for sale.

Real Estate Volume for May 2009

Overall, we have five and a half months of inventory in Phoenix metro. With another couple of months like this, we’ll be down to four months of inventory and the craziness we see today will feel like sanity. If you’re actively looking for a home, then you’re certainly well aware that the best homes don’t last a week. So if you find the home that’s right for you, write a good offer. Otherwise, you will be looking for a long time.

In Tempe, we are at 7.55 months of inventory compared to 8.68 months last month. This is especially startling considering last month, we had 456 homes available for sale and today, we have 846. The big difference maker here is that the 160 homes we had pending last month actually led to 140 closings. 140/160 is an excellent ratio because of qualifying issues, inspection issues, and other random life events that occur. Even better news, we have 211 in pending today.

Real Estate Inventory

The city of Phoenix specifically is doing well at 4.67 months of inventory. A large factor here is that homes less than $100,000 are moving like hotcakes. Because Phoenix is so diverse and large, it has many pockets where good solid homes can be bought for five figures. On the other end of the spectrum is Paradise Valley. They currently have more than 2 years of inventory. Of course, pricing is an issue for two reasons. First, is the fact that jumbo loans are at a much higher interest rate. Jumbo is anything larger than $417,000. The second is the obvious price tag.