This may come as news to a few of you, but not to those who are currently in the market, but.... after a very long pause, the Phoenix metro area housing market is hot.
Make that sizzling.
Here are some of the hot points:
- The inventory of homes is reducing rapidly. There used to be a one-year+ inventory of homes in the metro area. That has dwindled, county wide, to just over five months. In some cities it's even lower. For the first time in 3.5 years we are not in a "buyer's market". We are in that equilibrium phase. For buyers in the south and southeast valley it's a different story. It's turning into a seller's market.
- There is a return to multiple offers. Homes that are priced lower than others in the neighborhood are often receiving multiple offers. Three of my clients in the past month have submitted full price offers that have been rejected. In each case there was a multiple offer situation with buyers encouraged to submit "highest and best" offers. The most recent offer I sent in joined a list of 13 others.
- New Home inventory is way down. Over the last few years it was possible to go into almost any new home development and pick out a home from a list of inventory homes. Now, the inventory is vastly reduced or non-existent in many areas. In such areas, buyers of new homes will do what had been done in previous years: order one to be built from the ground up.
- The "low end" is hot. Homes that have hit the foreclosure market have been priced very low over the past couple years. Such homes allowed the first time home buyer and investor the opportunity to get in on deals that hadn't previously existed. Now, the prices of these homes are starting to climb. For the past three months there has been a trend reversal- home prices (on a cost per square foot basis) have been rising.
No one can predict the future.
However, for those who like to spot trends, it's undeniable. The signs one looks for are becoming easier to spot:
- Homes are selling more quickly.
- There are fewer to choose from.
- Prices are beginning to rise.
Is it a full-bloom recovery or a momentary blip on the chart?
That's the question many are asking. As my clients are discovering- it's getting much harder to buy a home. "Low-ball" offers aren't working. Even full price offers are being rejected. So, if you're wanting to purchase a home in Arizona- it's time to jump in again. If the trend continues, it's going to be harder to find that bargain home.
Chuck Willman is a real estate agent in the Phoenix metro area. 480.292.0600.