It’s typical for the market to start to cool off in July and that’s exactly what we saw this year after seeing unexpectedly large price increases January through June.
Price. The median home price (all homes) fell from $215,000 in June to $211,500 in July but was still 8% above July 2014.
Sales. Despite the reversal in price momentum, homes sales (SFD) still had strong upward momentum and were up 15% compared to July 2014.
New Listings. On the other hand, the number of homes that first hit the market in July, increased 7% from a year earlier. The increase was likely a factor in home prices falling. The increase in new listing was likely in response to the strong price increases in the spring.
Inventory. The key number to watch is the months supply, that is, the inventory of homes listed for sale. It was very low in July at 2.9 months. It was drawn down low by the unexpectedly high number of Phoenix homes sold in the winter and spring.
That number will increase through November. The key question is “How much will inventory increase?” If we have more than a 6 months supply in November, price increases in 2016 won’t be as high as in 2015. But if it’s under 4 months supply, that means we’re very likely to see strong price increases in 2016 and likely larger than in 2015.
Forecast. You may have noticed that I don’t have a feel for the 2016 Phoenix real estate market yet. I’m open to your ideas about what the 2016 market will look like. Leave a comment or email me.
Good News for Real Estate Numbers Geeks
I changed the “tooltip” so now whenever you mouse over any point on the green line on the “Glance” chart below (median price) you’ll get a detailed breakdown of the data for that month, not just the median price.
Home sales data has a ton of seasonality. When you see that the number of homes sold is going up or down, for example, it’s hard to untangle any real economic changes from the normal seasonal changes. I really like the updated graph because it makes it easy to compare the month to the same month 1 year ago and 2 years ago. By adding the percent change for the same month 1 year ago and 2 years ago it’s easier to get a feel for whether the changes are seasonal or real.
Phoenix Real Estate Market at a Glance
Note: When this post was written (August 2015), the graph only had data through July 2015.