Price
June is likely the peak for median home prices for the year. The median home price (green line) tends to fall in the Fall. I expect the median price for greater Phoenix to dip into the $240,000’s.
Phoenix has been strong and may see little or no decline in the median home price. The areas that have seen the largest falls in the median home - for example, Johnson Ranch, Maricopa and Anthem - will very likely continue to be the weakest markets this Fall.
Sales
The blue line is the number of listed homes sold by month. Looking at the yearly ups and downs, you’ll see with mathematically certainty that sales are going to taper off after the summer. We’ll certainly see several months with sales dipping below 5,000 - it’s a little time machine back to the real estate market of 2000 and 2001.
But now the median home price is $255,000 instead of in the $130,000’s as it was in 2000 and 2001. Despite the incredible increase in population since 2000 (increase in demand), sales are flat because the higher prices (quantity demanded at this price).
The economy is doing great right now but sales are trending lower. At these prices we could see sales bouncing around 5,000 a month for years to come and that would mean Listings would likely stay very high.
Listings
Listings (red line) only increased by 216 homes from June to July. (The Price and Sales data are cumulative for all of June but the Listings number was taken on one day in mid-July.)
It wasn’t until October last year that the increase in Listings was so small. So, it looks like Listings will fall again this Fall and they will start falling sooner than last year.
The decline in Listings was pretty steep last year… while it lasted. If the decline begins earlier this year, it’s a real possibility that the decline will last longer than last year. That suggests that the Listing inventory could fall more than last year.
3 responses so far ↓
1 Ken44 // Jul 23, 2007 at 1:19 pm
Yep, I also noticed that listings are slowing down earlier that last year. My guess is the inventory has about peaked and that next year it`ll be lower although not by much. (If the Feds start cutting rates things may pick up.)
All in all it is surprising prices in most areas of the PHX metro have held up like they have when you consider the massive inventory.
2 Cbass // Jul 23, 2007 at 8:09 pm
John,
Do you think people are going to pull their homes off the market and wait for the spring bounce again?
If sales are going to stay down or drift slightly lower, and you expect inventory will drop as well, I don’t see any other way for that to happen. It seems like all those folks plus some just ended up putting the homes back on the market in spring.
3 John L. Wake - Realtor // Jul 23, 2007 at 8:39 pm
Interesting point.
Last Fall, did some people take their homes off the market just to put them back on the market in the Spring?
Yeah, there was probably some of that churn.
And there is another kind of churn. For listing agreements that expired unsold, the Sellers might wait until after the holidays to put it back on the market.
I think the major factor however was that people simply choose not to put their homes on the market until after the holidays.
However, I was very surprised last autumn by the steepness of the fall in inventory and it’s turning on a dime in February. So, I don’t understand what’s happening.
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