Phoenix Housing Inventory Down

Price (green line)

The median price in metro Phoenix of single family homes sold via the MLS fell to $118,000 in April 2009. The median home price in Phoenix, Arizona hasn’t been that low since sometime in the 1990’s. I only have data back to January 2000.

At $118,000, the median single family home price in metro Phoenix has fallen 55% from the peak median home price of $264,800 in June 2006.

I expected that the median home price would NOT fall from March to April however, it fell by $2,000. Nevertheless, that is the smallest such price decline since last April (2008).

We are searching for the bottom on median home price but it’s worth remembering that we know very well where the bottom was for the number of homes sold. The bottom for the number of homes sold in a single month was over a year ago in January 2008.

Sales (blue line)

Single family home sales in metro Phoenix AZ in April were incredibly high at 7,681 homes. That was the best month for home sales since September 2005 and was 68% higher than a year earlier in April 2008.

The surprisingly strong increase in sales from March to April, up 11%, suggests the market is so strong that the high season will stretch into June this year.

Listings (red line)

The number of single family detached homes listed for sale FELL an incredible 12% from mid-April to mid-May. The mid-May inventory is 32% less than a year earlier, in mid-May 2008.

The months of inventory in April of single family homes listed for sale was well within the “normal” range of inventory with the equivalent of a 5 months supply.

A year ago, in April 2008, we had a 14-month inventory. The inventory peaked at over 17 months in November 2007. Now, it’s 5 months

Be aware that the supply situation varies tremendously within metro Phoenix depending on the geographic location and the price range of the homes you are looking at.

Conclusion

With the sharply declining inventory, next time the data is published we may finally see a month with NO decline in the median price of single family detached homes in metro Phoenix.

(”MLS Listings” are measured at one point in time, usually the 15th day of the current month. “Median Price” of homes sold and the total number of home “MLS Sales” are for the entire preceding month.)

Comments

[Sean in CA:]

bouncing along... local markets being manipulated by banks and realtors holding properties off the market so as to restrict supply to try and force prices up. how many homes being rented out, owners just biding time to sell once they get their heads above water?

May 17 11:25 AM

[notsosmart:]

funny stuff with unemployment rising.

May 17 04:58 PM

[waldipup:]

Since sales totals dont account for inventory reductions , we can only conclude two possible reasons :

1) People have decided to keep their homes instead of sell.

2) Prices have dropped too low for some to sell (negative equity) or
a refusal to sell (struggle and wait) rather than "giveaway" their
largest asset.

Unless it's the first above, we can expect any attempt at price increases to be met with an accompanying rise in inventory for sale , stunting prices.

Thus "jumping in" is not necessary - prices will bump along for awhile before any meaningful rise that holds.

May 17 07:14 PM

[nojoker:]

The decline in listings could be a phantom decline. Yes, the actual number of listings have declined, but it's not primarily due to sales of existing homes. The reason could be foreclosures. The owner kept the house listed until the bank took it. The bank may, or may not, list the property in a timely manner. I've found properties that have taken more than a year to hit the MLS - bank owned for that entire time.

May 19 01:30 AM