The inventory of homes listed for sale in metro Phoenix took off again in February after a significant falling off in late 2006. April’s increase in inventory was the largest since last June.
Looking at the first 3 months of 2007, it looks like total Phoenix area home sales in 2007 will certainly be less than in 2006. Sales will probably be closer to 2001 or 2002 sales.
Despite the rapidly increasing inventory of homes for sale, the median home price in March increased $4,500 to $252,500, the highest it’s been since last August.
I’ve heard that employment has more impact on home prices than the number of homes for sale and that certainly seems to be the case here. The economy is doing well, people have jobs and many sellers aren’t going to sell unless they get “their price”… and they aren’t going to get their price… so the inventory increases.
If the Arizona economy tanked and people lost their jobs, many sellers would get very motivated very quickly and prices might indeed fall. But as long as the economy stays decent, it doesn’t look like the median home price is going to fall much, if at all.