Welcome to summertime in the Phoenix Metro area where daytime temps may break some consecutive day records of over 110 degrees this week. But hey, our Phoenix “Suns” are creating all sorts of excitement for the Valley faithful having just swept the Denver Nuggets and before that sending the hated Lakers packing. We like that kind of hot!
Bu, this is a real estate column, right? Ok, I’m trying to tie this together. So if Phoenix is issued a heat warning for temps near 115 degrees, but next week lowers down to say 107, would we say that we’ve cooled down? Well, yes, technically that’s correct, but just try and convince the visitor from Northern California who thinks 90 degrees is hell-like.
This is a countertrend. Though it’s currently negligible, when there’s going to be a significant market change, it needs to start somewhere. It may be now.
Well, this is what what’s happening in the Valley residential real estate market. The supply of inventory is growing (see chart) which is “technically” good news for buyers, right? Well yes, but why are buyers still being confronted with multiple offers on properties and seeing prices still increase? It’s because the market is still very hot, but statistically is cooling.
If you view how our listing supply moves during the year, you would see that it starts at a base number on January 1st and then grows for the next 2 months (last year was an outlier). It then tapers off and decreases until the end of August, at which point it increases to the holidays and then drops off through the end of the year. Since 2014, January’s numbers have steadily been lower and lower, and…
To sum up, the stats are showing a rise in inventory during the part of the year that usually decreases. This is a countertrend. Though it’s currently negligible, when there’s going to be a significant market change, it needs to start somewhere. It may be now. But then again, summer’s just starting.