Another month has gone by, and there has been little indication that things will slow down. We see many properties hit the market, and in just a few days, they are gone. Overall, our inventory has gone from 33,621 homes on the market to 27,002 homes. That’s a 20% drop in inventory.  We have gone from 5.52 months of supply to 4.66 months of supply in a very short time.  Additionally, 36.4% of homes are being bought in cash. Overall, 8291 homes sold in Phoenix metro in June.  That is up from 8176 in May.

Real Estate Market Analysis June 2009

Tempe Real Estate

Tempe specifically has gone from 7.55 months of inventory down to 6.32 months.  What was once 846 houses on the market has become 753 houses.  This is definitely consistent with what my clients have seen.  We have seen many homes that have offers before we even show it.  It certainly feels like 2005 all over again.  It’s gotten to the point that clients that really want to live in Tempe are buying regular resales.  Fortunately, traditional sales are now priced almost like foreclosures.

Real Estate Supply for June 2009

Phoenix Metro

Across the board, all the cities have seen a significant drop in supply while keeping demand constant.  Chandler and Gilbert have surpassed Phoenix in supply with 4.18 months and 4.21 months compared to 4.24 months.  Scottsdale and Paradise Valley continue to have longer supplies.  This makes sense as these are our two priciest cities.  Nonetheless, they’ve both had 3 months of supply decreased.

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.