***SINGLE FAMILY LISTINGS UNDER 12K***
Pendings Rebounding rapidly
Resale inventory additions are tepid at best
Phoenix real estate market starting to make news
Pending: 12,686 ( +458 from last week)
Pending Sfam: 10,918 ( +379 from last week)
AWC: 7,811 ( +213 from last week)
AWC Single Fam: 6,826 ( +193 from last week)
Active: 15,263 ( -557 from last week)
Active Sfamily: 11,845 ( -444 from last week)
Closed: 3/5-3/11/12: 1,570 ( -858 from last week)
Closed Sfam: 1,309 ( -738 from last week)
Inventory continues to crater in the Arizona Regional Multiple Listing Service; single family homes have now fallen under 12,000. That is a a very thin available selection for a market of this size. Four years ago at this time, there were 44,000 single family homes on the market. Even the overall market of 15,283 is tiny compared to relative demand, and we are seeing it now I think show up as affecting pending sales; there simply is not enough supply to feed the demand. Last year at this time there were about 500 more pendings at this time; I think there are a lot of people who haven't been able to buy the home they wanted yet, and that is going to slow the sales numbers for March. At some point, this was going to happen. Last year there were twice as many homes, and buyers could choose; this year there are dogfights to buy the best available property. There are a lot of dogs barking up the same tree right now, and all but one will have wasted their time on that property. It does delay buyers. I think we will finish with less sales in March than last year, possibly by quite a number. However, the result of this solid demand is prices are going to keep rising.
This level of inventory is going to start affecting homebuilders; if they can put out a decent priced home now, they are in the running for a buyer, even if they are priced a bit higher. The median continues to climb, which means new builds are getting more competitively priced, and this should be a huge boon to builders. Arizona seems to be in excellent position to make a return to a good healthy real estate market this year; land may not recover right away, but housing is going all in the right direction.
One note regarding the pendings: even if they are lower, the AWC field is higher than last year, and this speaks to short sales. Short Sales are happening faster now; the increase in AWC can be attributed to this, and AWC do feed the pendings and also closings somewhat under the radar as some spend very little time if any under pending, depending on the agent, and or the banks short sale procedure. We could end up with as many sales in March as we did last year; we have been doing that very thing so far this year with lower pending numbers throughout January and February as there were last year.
New listing activity continues to fall as well; its running about 20% behind last year. These combinations make it easy to see why we would have this dearth of inventory.
We are too early in the month to make a call on the median price, but so far we are seeing stronger numbers than February, and strikingly stronger than March 2011; about 15% higher. I will discuss that more later in the month when the numbers are solidified a bit more.
I do want to address a few things we are seeing about Phoenix real estate; I have been calling this since the fall of last year when it became apparent that inventory was not growing despite the seasonal slowdown: we were going to have this little boomlet due to lack of inventory. We are now seeing this reported in local and national news publications. Here is an article in the AZ Central about buyers being squeezed out by investors. (I thought it was settled science that we had a housing glut?) Of course, this implies optimism if you look at it broadly although the article is more a hit piece on investors than it is reporting the real story that hmm, we might have a recovering housing market.
The Wall Street Journal also leads with a Phoenix real estate turnaround story. You will have to have a subscription to read the whole article, but you get the gist from the lead of the story. This is happening here, and it is happening because the excess inventory has burned off and what remains is what made Phoenix a destination for so many people before: relatively low priced high quality housing, a welcoming business friendly economy, and an incredible climate. We are not healthy yet, but the fever seems to have broken, and the patient is upright again. The next stage is whether this lack of resale inventory results in New homes being built and bought. Construction is a great jobs engine, and it is some of the medicine that Arizona needs right now to bring us back to full speed.
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