Phoenix Real Estate Market at a Glance
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Phoenix metro home prices were up 7% in December over December 2017. That’s up 5% in real, inflation-adjusted dollars, a great year for appreciation.
The big story is the number of Phoenix homes sold in December was down 10% from December 2017!
The supply of homes for sale in the MLS (inventory), however, didn’t increase much, up only 1%.
That inventory increase was so small, in part, because the number of homes hitting the market (new listings) actually fell, down 1% this December compared to last December.
The supply of homes for sale is key to what happens to home prices. The supply this January is 3.4 months supply which is tight but less tight than last year when it was 3.1 at this time. I consider 4 to 6 months supply to be balanced. Home prices don’t increase much when supply is between 4 and 6 months.
Stay Tuned
I’m following the numbers very closely right now because the market is obviously changing. The big question is, “How much will it change?”.
So far it doesn’t look major, 2019 looks a lot like 2017. 2017 was a very tight residential real estate market in metro Phoenix, just not as tight as in 2018.
The difference this year (2019) is that even if the fundamentals are the same as in 2017, the market was tightening in 2017 but so far in 2019 the market has been loosening a little bit. Even if the fundamentals in 2017 and 2019 were identical, they would be 2 very different markets because the market was headed tighter in one case (2017) and looser in the other (2019, so far).
I plan to write another post later this week looking at more data for January. Spoiler Alert: The conclusions in this post on January 13 still look good… at least for now.
What do you think? Leave a comment.
2 Responses to Sales Down 10% – Phoenix Homes
Do you know at which part of the cycle we are in, when people start moving from CA? Did we see this at all in the early 2000’s? I was at a stoplight the other day and was surrounded by CA plates. Not sure if they are moving because a jobs, real estate or political reasons. What is your take on it?
Probably near the top of the cycle. Suggests that prices have gotten so high in California people will leave. Saw something recently that Arizona is one of the top destinations for people leaving California.
During 2004-2005, I personally noticed a lot of California investors buying in Phoenix. Check out the graphs here https://arizonarealestatenotebook.com/case-shiller-home-price-index/ for LA, Las Vegas and Phoenix during 2002-2005. There was definitely contagion from LA to Las Vegas first and then to Phoenix. But interestingly, all 3 markets started to tank at the same time, 2006.
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