We’ve been reporting that it’s a seller’s market for a number of years now. What that ultimately means is that the ratio of supply and demand weighs heavily in favor of sellers.
Some might infer this means demand is high and supply is low. Truthfully, the imbalance we have in the Phoenix area lies solely with the supply. Yes demand to date has been pretty average, lack luster even. But when supply is as low as it is, it makes ordinary demand levels feel higher than they are.
But that may be changing! The Mortgage Banker’s Association has reported a massive jump in loan applications by something like 20%. This could be indicative of a higher than normal buyer wave hitting us in the Spring.
Local Real Estate statistician Michael Orr believes this could be for any or all of the following reasons:
- Low interest rates
- Confidence in the strength of the economy
- Loosening lending standards
- Buyers wanting to avoid missing out as prices start to accelerate upwards again.
What would this mean for the Phoenix Area? Well it’s certainly not good news for buyers, who already are facing an extremely competitive marketplace, particularly in the median price ranges. It also buttresses what my dad prognosticated about a month ago with a potential for sharper than normal price increases over the next year.
Also worthy of note is local Real Estate journalist Catherine Reagor’s reporting that Phoenix metro area is now the hottest market in the country. Depending on what study you look at, we’ve hovered in the top five along the likes of Boise, Idaho and Las Vegas for a few years now. It seems at the moment however, we are the king.
We never really know what’s going to happen next with our market. But when you combine our absolute dearth of inventory with potential for increased demand, the Phoenix Area market really only has one way to go for the time being.