While most headlines tout the growing strength of the housing sector, we take a look at recent numbers which paint a different picture.Real Estate is local. We’re looking specifically at production homes built in the last 14 years in West Phoenix. The hotbed for investment activity over the last 3 years.
To be sure, there is value in the market; you just have to look for it. And look. And look. And then, maybe you find something. Prices, without question are up, and rightly so…with interest rates at fresh historic lows seemingly every week, the cost to own is cheaper than the cost to rent. So there is real pressure to drive housing prices higher……. Up is the current direction of the market, or is it?
Whats going on with Inventory?
- Bank REOs have responded and listed their prices according to the market, or what they think is the market. Guess what? Their not moving at those prices. At least not like they were in the first half of the year. Bank REO inventory for this segment is up 53% over the last 3 months.
- Short Sale buyers are now sellers. Look around, any short sale buyer with even a small appetite for a dollar [and who couldn’t use an extra $20,000 in today’s economy?] is back on the market with a new price 20-30% higher than their purchase last month. Where have I seen this before?
- Traditional owners sniffing a recovery are dipping their toe in the market, hoping to get out of their home.
All this points to rising inventory.
In the last 2 months:
- New listings/month are at 12 month highs
- Sold listings are the lowest they’ve been in 2 years
- Months of inventory is back to Dec. 2010 numbers – almost double where it was in March, April, May of this year.