I expect the number of houses for sale to increase a lot this summer… but to still be low.
Market Psychology
May is the last month of the high season for Phoenix house sales and typically the number of houses for sale would be falling in May. Not this year. The supply of houses for sale is already so incredibly low that supply has been increasing a little bit the last couple of months.
That makes me think when the high season ends, we’ll see the number of houses for sale increase noticeably and that might change the psychology of the market by the end of the summer.
When people slowly start to notice that the number of houses for sale is increasing, won’t that change the market psychology fast?
Shadow Inventory
I’ve also noticed that more and more real estate agents are delaying putting their clients’ houses in the MLS. That delay makes the number of houses listed for sale in the MLS artificially low. I talked about that here.
Since I wrote that piece 2 weeks ago, it looks like agents, on average, are even slower to put their clients’ houses into the MLS. It’s a small percentage, but it artificially lowers supply in the MLS at the worst possible time for buyers… but it’s probably good for sellers.
It does, however, make me think that when the supply of houses for sale starts to rebound during the second half of the year, it might increase faster than we now expect.
Were Some Potential Sellers Afraid of Covid?
One of the top reasons people used to give for the low supply of houses for sale was Covid. Potential house sellers were afraid of having strangers in their homes during Covid so they put off selling. That’s what I thought last summer. Now, I don’t know if that was a big factor explaining the low number of house sellers.
But to the degree it was a factor, shouldn’t it be fading as most people get vaccinated? Shouldn’t any Covid cautious sellers start putting their houses up for sale soon?
Click on the graph to go to the full-size, interactive version.
This information can vary a lot in different parts of metro Phoenix. Your real estate agent can find the data for your specific city or zip code at The Cromford Report.