Price (green line)
The median home price in metro Phoenix continued to fall to $205,000 in May despite a relatively strong number of homes sold for the month.
The May 2008 median home price is exactly $50,000 less than in May 2007. That is, the median home price in metro Phoenix was 24% higher a year ago.
Sales (blue line)
Homes sales in metro Phoenix in May were very strong at 5,600 homes. We haven’t seen a number that high since before the mortgage meltdown in August of last year.
Home sales started out the season slow, we didn’t see big numbers in March this year like we usually do, but sales took off late in the season, April and especially May.
It will be interesting to see if the strong sales continue into June. Strong closings in June is a sign of a strong market. In most years, sales tend to fall off a lot from May to June.
Listings (red line)
The number of listings continued to fall in June, just the opposite of what happened last year.
The number of listings available for sale fell 2.9% from mid-May to mid-June. Last year, listings increased 1.7% over the same month.
That’s a totally different market dynamic. It’s funny how a huge price decrease can change things.
Conclusion
The market is starting to adjust… finally. But it has a long way to go to get inventory in line.
A year ago I didn’t think the median home price would go this low and certainly not this quickly. With the huge inventory of homes for sale still overhanging the market, prices could conceivably go crazy low in the same way they went crazy high earlier.
“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.