Phoenix Housing Market Update February 2020
February Market Update
Good morning everyone, Jaime Meraz with The Meraz Group here with your monthly Phoenix housing market update. We track these data points and shoot these short videos so you’re a well-informed consumer and understand what’s going on in the housing market around you. So far in 2020, the story remains the same- Phoenix has a major inventory shortage. In fact, we usually see a push of new listings in January as people begin to prepare for the “Spring Market.” So far this month we have actually seen less listings than sales, driving the overall number of homes available for sale- down! In a typical Phoenix housing market we have anywhere between 23,000-27,000 homes for sale. Right now, as we shoot this video, there are less than 12,000 active listings that are not under contract.
Now Typical supply and demand relationship implies that with this inventory shortage, prices will increase. In fact housing prices have already increased over 7% in the last 4 months. What’s interesting though is that price increases are generally a LAGGING indicator. This means its the last data point to change when the market is unbalanced. We are already seeing increased competition for desirable homes with multiple offer situations and upward bidding on sales prices.
As a seller in this market, your home will attract buyers no matter what, but it’s still important to price competitively given your area, size, and condition of the home. There are homes out there that are priced through the moon and sitting for longer periods of time because of it. Additionally, if you’re waiting for that typical spring market to list your home, its already here and we expect the low levels of inventory to persist for several more months.
On the other side, we have buyers that we cannot find homes for! There is such low inventory that our active buyers either cannot find a home, or are not ready when one comes on the market and it’s gone soon thereafter. We are counseling our clients to really be ready with their offers and financing as that gives you the best chance on buying the house you want.
Lastly- The last time we saw prices and inventory at these levels was just before the housing crash and we want to establish on the record that there is no data to support improper lending practices or other issues that may cause a bubble in our market. Simply put, the upward pressure on prices is due to an inventory shortage and the fact that we live in an awesome state where everyone wants to live.
As always if you ever have any questions about housing in your area, do not hesitate to reach out!
I hope you enjoyed this market report and make it a great day!