I’m doing CMAs for some very patient and understanding folks (I hope!). I got a bit behind on doing CMAs because of a closing I had this week and some extensive research I did over the last week or so for a potential investor client.
Right away in the first two CMAs today I found inventory levels in the 4-5 month range, one in Coronado Ranch in Gilbert 85297 and the other near Paradise Valley Mall in Phoenix 85032. I consider 5 to 7 months of inventory to be “normal.”
Now, of course, one of the main reasons for the lowered (low?) inventory is that we are just exiting the high season for home sales in Arizona. The number of homes that sell in the next 6 months will be significantly less than in the last 6 months so the inventory could very well increase again. The big question is, “How much?”.
Nevertheless, the inventory of homes for sale right now in many areas in metro Phoenix is much lower than it’s been for a long time.
Here is a chart of the trend in Gilbert 85297 where Coronado Ranch is located.
You can see these inventory charts for 125 metro Phoenix zip codes. See the list of zip codes in the sidebar.
{ 6 comments… read them below or add one }
shuss 07.02.08 at 7:45 pm
Hi John,
Decrease in inventory in 85297 is not due to sales. Its merely due to homes being relisted in their new zip codes. 85295 and 85298.
Sales in this area still sucks. Since last year, the inventory has dropped from 58,000 to 53,000. Not significant by my standards.
http://www.arizonarealestatenotebook.com/2007/06/29/new-zip-code-map-gilbert-arizona/
shuss 07.02.08 at 8:00 pm
For Gilbert:
Homes SOLD : June ‘07 - 333
Homes SOLD: June ‘08 - 346
Not much improvement over last year. Sales are flat lining not increasing.
Price per Sq ft: June ‘07 - $159.29
Price per Sq ft: June ‘08 - $122.4
Price per Sq ft: June ‘09 - ???
New home builders are hurting resales in Gilbert by cutting prices by building tons of ugly looking boxes.
Jim Zirbes 07.02.08 at 10:23 pm
Hi John,
Great blog!
I’m a long-time reader, first-time commentator here.
Besides those already mentioned, and the obvious–that prices are down, therefore demand is up, (thank goodness–if the distressed properties were all just sitting there with no offers–Wow!–we would really be in trouble then), I suggest there are several others reasons as to why the “how-many-months-supply” is down, including:
1. We continue to see a very high number of “sales” not come to close; a.k.a. DFT’s- Deal(s) Fell Through. A normal amount of DFT’s for residential resale in this market(offers accepted that don’t make it to C.O.E.) is said to be around 20%; right now we are in the 35% to 40% range.
2. The “grey” market; meaning the larger than historical percentage of properties for sale not currently being placed in ARMLS, (versus “ordinary” listings), including the significantly higher number of REO’s not showing in the MLS,
3. The shift of owners who would otherwise be sellers (many of who are just looking to hold on financially), who instead choose to be “accidental-would-be landlords” of sorts, at least for the shorter term (they hope), and place their homes into the rental market (many also not put in the MLS), and
4. Like the unemployment rate as published by the federal government; one that does not take into account people who have given up looking for work in the published unemployment rate, we also have MANY home sellers who have simply given up for now–they have decided to stay put and sit this one out…expireds & canceleds are also up.
It will be interesting to factor in some of the numers and insights from what we’ll see in the 2nd Quarter ARMLS Report when it comes out as it relates to this…
Take care,
Jim
http://www.RealtyBlogger.info
Director of Agent Development for HomeSmart & Dan Schwartz Realty
John Wake - Real Estate 07.03.08 at 12:12 am
shuss,
Great point! I forgot about that. The change in the zip code boundaries in Gilbert last summer definitely confuses things.
But now that I think about it, you would think by January most of the listings would be listed with the correct zip code and any changes since then would reflex reality.
Let’s check out a nearby zip code that didn’t change boundaries last summer.
http://www.altosresearch.com/AltosCharts/AZ/Gilbert/85233/inventory/b/a/m/e/sf/5567783.png
Inventory in 85233 which didn’t change boundaries still fell significantly, at least according to Altos Research’s graphs.
Jim makes some great points too and I’m going to guess that something akin to Jim’s #3 is the largest factor.
That is, a lot fewer homeowners are interested in selling their homes when it’s worth less than $250,000 compared with two years ago when the same home was worth more than $350,000.
As prices have declined, the supply of non-bank-owned homes for sale has been, I suspect, greatly reduced.
Thanks for stopping by!
Frank 07.03.08 at 8:36 am
Jonathan Dalton publishes interesting inventory numbers every month. The inventory have been declining,
http://www.allphoenixrealestate.com/07012008/phoenix-real-estate-inventory-update-july-1/
Jim Johnson CRS 07.05.08 at 8:38 am
Great Blog! I have been selling real estate in Bend Oregon since 1981 and find it refreshing to find a helpful blog like yours! Keep up the good work!
http://www.bendoregonrealestateexpert.com