Listing Supply to Worsen in the Phoenix Metro Area?!

By Buying, Mike's Articles, Phoenix Metro Real Estate News, Selling November 4, 2019

Since 2013, our Phoenix Metro residential real estate market has suffered a continuous annual drop in available listing inventory. A number of blogs ago we discussed reasons why this lingering problem persists. A few possibilities were discussed, but an article that appeared in today’s Wall Street Journal (WSJ) about slow home sales nationally, also sheds light on what is perhaps the main reason why listing supply is shrinking: Existing homeowners aren’t moving on!

According to the WSJ article, discussing why sales have dropped off, states that the inventory of homes for sale, adjusted for population, is at a 37 year low which is how long record keeping for this has been tracked.

In 2010, according to Redfin’s chief economist, homeowners were staying in their homes an average of 8 years, five years longer than they are now, which is 13 years. Check out their article here.

Record low mortgage rate levels, record levels of home equity, and a strong jobs economy have not jump-started sales. Per the WSJ, the baby boomers are the main culprits for fewer sales, as many are staying healthier longer and choosing not to downsize.

And the problem could get worse! If mortgage rates rise, homeowners will be more inclined to stay with their lower mortgage rate home.

In Arizona, our inventory supply currently stands at 2 months, and could (will?) be further reduced by more folks relocating (now occurring) to our sunny and stable state. To provide perspective, in 2007, available inventory measured by months on the market, was over 20 months! (see chart below) At that time, there were over 58,000 homes for sale, compared with under 15,000 today, which is 74% fewer homes for sale then back then.

Mike’s takeaway? Unless you’re no longer going to be a homeowner, make sure you do a lateral move and stay in the market. This lack of inventory in Arizona, could be a scourge for years to come.

About the Author
Michael Bodeen, Associate Broker

     I was born and raised in San Rafael, California, from the mid 50’s to the early 70’s. I had super parents who worked hard to provide 5 kids with a good Catholic education – despite my best attempts to overthrow the knuckle-cracking regime of Sister Mary Anselma. My dad worked as a self-employed butcher until his retirement at 65 and enjoyed many wonderful years until mom passed away in 1992.

     Dad passed away in the fall of 2006 having lived a great and full life into his early 90’s! In California, I attended college in Chico and Sacramento as a “Sosh” major, but like many of my contemporaries, I did not have a clue what I wanted to do when I grew up. Because of my age, I missed the Vietnam War and into my early 20’s I had many typical youthful indiscretions.

     Thankfully, that was a brief period of my life, and with greater thanks, not too much damage was sustained in those early and rebellious years. And by the way, those thanks are due to the answered prayers of faithful relatives who prayed for years that a wayward Michael would turn his life over to the Lord, and in January of 1982 that’s what happened.

     I lived in Sacramento, California in the mid 70’s, and later moved to Truckee, California, which is near Lake

Tahoe and Reno, Nevada. Truckee’s often labeled the “coldest spot in the nation.” Why did I move there?

My father-in-law was a real estate broker in Donner Lake, California, and despite his cantankerous disposition, he seemed very successful in his real estate endeavors. I joined him in sales in July of 1976.

    The Truckee and Lake Tahoe area was a wonderful place to raise a family, but a difficult and cold environment to live in, but we did so for 18 years. In 1994, my wife, Karen, and I visited Scottsdale at a friend’s request, and within 8 months, our family of 5 had relocated to “the valley” – or is it a desert? Whatever it is, it’s warm. At any rate, 24 years have gone by since we made the break from the late great state of confusion, uh, California, and it’s turned out to be a great move.

     As for hobbies, I enjoy family, friends and travel. My kids Robert, Kendra, and Jonathan are now 40,

34, and 31 respectively. I recently became “gramps” for the 4th time as well. It’s a nice time of life. Karen remains as lovely on the inside and outside as the day we were married. We continue to wonderfully grow together as the years advance. As an ordained Christian Chaplain, I volunteer Preaching at Florence Prison with Along Side Ministry. The ministry helps make the formerly incarcerated able to function, even thrive, on “the outside.”

     Should you choose to have me represent you in the sale or purchase of your home, you’ll be receiving my 40+ years of real estate knowledge, counsel, and experience (including negotiation experience).

    Beyond the transaction, I’m always available to you, should you ever need my real estate advice.