Subscribe to get posts via email.
Number of Homes Sold.
Number of Homes for Sale. From September through December, the number of active listings
Number of Homes Hitting the Market (New Listings). The increase in the number of homes for sale (increase in supply) would have been even larger but the number of new listings hitting the market fell 2% from September through December compared to the same period in 2017.
That was weird to me because the median sold price was about 7% higher in the autumn of 2018 compared to the autumn of 2017. You would think the higher price would have attracted more homes onto the market, not
Anyway, the net result was that like many West Coast cities and Las Vegas this autumn, the number of Phoenix homes listed for sale increased significantly but despite the increase, the supply of homes for sale was still quite tight.
Why Did New Listings Fall in the Fall?
Until I researched this post, I had a working theory that some home sellers might be waiting until the high season started in January to put their homes on the market. The idea was that the low number of new listings in the autumn would translate into a higher number of new listings starting in January.
It’s January now, so let’s test the theory.
Okay, that idea didn’t work out. For the first 10 days of January this year, the number of new listings (2,184) is slightly less than last year (2,207). That answers my question about whether some sellers were waiting for the high season to list their houses. They weren’t.
So I still don’t know why the number of new listings was lower from September through December. It’s pretty much the big question behind the residential real estate market the last several years, “Why is the supply of homes for sale so low when prices are so high? Why aren’t people selling their homes?”.
Here’s a couple of possibilities.
- Demographic Reasons. Older people don’t sell their homes as often as younger people and it seems some of us Boomers are getting older.
- PBSD (Post Bubble Stress Disorder). After the Great Real Estate Bubble, many people think it’s smarter to just improve their current houses instead of selling and buying better ones.
- Other. Here are some other proposed reasons but they don’t ring true to me.
What’s your theory? I want to hear it. Leave a comment.
What January Tells Us So Far
Although the number of new listings so far in January is essentially the same as last year;
- The number of homes sold was down 14% compared to the first 10 days last January, and
- The number of listings under contract (which foreshadows future home sales) in the first week of January was down 15%.
If new listings continue running similar to last year but home sales continue running lower than last year, then the supply of homes for sale will continue to increase.
Just be aware that the supply of home for sale right now is still super low, around 2.5 months of supply. But, on the other hand, a year ago we had 2.2 months of supply so the supply is loosening up a bit.
This trend would have to continue for months (I’m not sure how many months) for the supply of homes for sale in Phoenix to enter the “normal” range. I consider 4 to 6 months of supply to be “normal” so we have a long way to go to get to “normal.”
Takeaways
- The supply of Phoenix homes for sale is increasing but right now the supply is still very tight.
- Home prices should continue to increase but more slowly than the 7% annual rate we saw in 2018.
10 Responses to First Phoenix Real Estate Data for 2019
Hi John. IMO, the reason why the housing supply is so low is because people are sitting on the sidelines watching their value increase. If I am right, once the market slows and people take notice, there will be a surge of listings. At the same token, people are also sticker shocked on the value of the larger, more desirable properties. I just described my situation. ;)
I agree. Makes me more confident hearing you say it, too. I guess people don’t follow the market as closely as we do and once “people take notice, there will be a surge of listings.” So there’s a lag between the market changing and the general potential home seller realizing it. I’m expecting a surge in landlord sales but so far I have seen any evidence of it but I don’t really have data on investor sellers, although I have data on investor buyers.
I love this site I just found it. I think the state’s losing residents trough the last few years also plays a big role. Many came and bought but many have been renting and are coming on the market as buyers. That is just my opinion for what I have seen. I hope it helps! :)
Ed, Thanks for the comment! I appreciate you taking the time.
John, just want to thank you for the time and effort you put into your newsletters with the added bonus of making them interesting AND comprehensible to lay people such as myself.
Much appreciated!
You’re so nice! Thanks for taking the time to comment. Actually, I ended up rewriting the post 3 times because I kept thinking it was too confusing and needed to be clearer so I really appreciate your comment.
I am wondering if the 20% decrease in the stock market from Oct-Dec has some people putting off the idea of moving for the time being. Appreciate the graphs and regular updates!
Great point!
Great update. Confusing market. The fall was slow and I am hearing a lot of people remark about a bubble. I don’t see it with so many moving here to retire and it doesn’t seem like we are over building. Motivation on the side of buyers and sellers seems lower and not a huge sense of urgency in most cases. I can see why it’s hard to update people on the market right now. It’s a little strange.
“Motivation on the side of buyers and sellers seems lower and not a huge sense of urgency in most cases.”
Well said! That’s the 2019 market in a nutshell.
Comments are closed.