We’re seeing more stories about home prices falling.

This is from the Orange County Register;

“Thomas’ biweekly report found a stark change in the market for existing homes as of Sept. 20 vs. a year ago: selling time was 26 days longer as listings grew by 22 percent… As summer ended, the four-county region… had 36,923 listings, up 6,548 in a year or 22 percent. It’s also up 10 percent vs. the six-year average.”

And this is from Redfin on Seattle, San Jose and Portland.

“In San Jose and Seattle, the supply of homes was up nearly 50 percent year over year. In Portland, inventory increased 25 percent. The increase in inventory is the combination of more people putting their homes on the market as fewer buyers are stepping up to purchase. San Jose, Seattle and Portland saw respective sales declines of 16 percent, 19 percent and 6 percent.”

Click to enlarge.

Phoenix Housing Price Outlook

(Play with the interactive versions of these Phoenix charts here.)

Despite signs that West Coast markets are changing, I’m not seeing any signs (yet) the Phoenix real estate market is changing. The most you could say is that home price increases in Phoenix are decelerating, maybe.

Phoenix Real Estate Market with New Listings

Click to enlarge.

You can see on the graph that the median price recently passed the peak in 2006.

On an inflation-adjusted basis, however, real Phoenix home prices are still 21% below the peak.

Real Phoenix Inflation-Adjusted Home Prices

Click to enlarge.

Like last month, I dived deep into the charts at The Cromford Report but couldn’t find any sign the Phoenix real estate market is plateauing (yet).

My conclusion is that home prices will increase strongly in 2019, although, probably not as strongly as in 2018. August prices were up 6.9% from last August.

Phoenix Housing Market Statistics

I’ll be following the Phoenix real estate market closely to see if any of that California voodoo starts to spread to the Phoenix real estate market.

During the Great Real Estate Bubble, home prices in Los Angeles took off a couple of years before home prices in Phoenix, although, home prices in both markets peaked at the same time.

Recession Coming

During the Great Real Estate Bubble, home prices peaked about 2 years before the recession started. Phoenix home prices had only fallen ~5% from the summer of 2005 to the summer of 2007. But when the recession hit, Phoenix home prices fell off a cliff.

In this cycle, I’m thinking real estate probably won’t peak before the next recession hits. We may not see any home price declines in Phoenix until the next recession (and there’s always a next recession).

The most popular guesstimate I’m seeing among economists is the next recession will begin in 2020.

Unsolicited Advice

First-Time Home Buyer. If you plan to buy your first home, your choice is probably to either to buy now or wait until after the next recession. I don’t know which decision would be better. Actually, a time machine would be your best option. Set it to 2011. Although, if you have a time machine, maybe it doesn’t matter what happens to home prices.

Sell And Buy At Same Time. If you plan to sell your current home and then buy another home, it pretty much doesn’t matter when you sell and buy. Top or bottom of the cycle, it doesn’t matter much when you’re buying at the same time you’re selling.

Landlords. If you’re a landlord who wants to sell at the top, I’d definitely seriously consider when the lease is up in 2019, to it fix and sell it.

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