The Phoenix housing market appears to be approaching what we could call a normal and balanced market.
Right now you’re probably thinking: “What did he just say?”
Forget what you read in the newspaper and hear from the media about the Phoenix housing market. Instead, consider the following facts:
- inventory is over 20,000 properties for the 1st time in 2 years (see Phoenix home listings report)
- demand for homes in the Phoenix housing market is cyclically down this time of year with ~ 6,350 sales in September 2013 (see Phoenix Home Sales)
- the price per square foot in September 2013 was $121 (see detailed Phoenix housing market prices), which is the exact annual average of all homes sold in 2004 when the housing boom began (see year over year home prices)
- Total foreclosure sales (bank owned homes and short sales ) are under 1,100 for the 1st time in 5 1/2 years. In 2008 foreclosure sales really started heating up in the Phoenix housing market (see foreclosure sales)
PHOENIX HOUSING MARKET TRENDS
The last time we truly had a balanced and normal Phoenix housing market was in 2003 and in the 1st quarter of 2004. Home listings averaged between 22,000-25,000 homes, foreclosures were barely noticeable, and demand was in harmony with supply.
The seller’s market in the Phoenix housing market began somewhere around the 2nd quarter of 2004 and reached a frenzy in March 2005 when active listings were at an all-time low of about 6,500 properties (pure actives, not those under contract but excepting backup offers). However, listings were back to the normal 25,000 homes in the Phoenix housing market by early 2006.
Listings rose to 46,000 properties by the end of 2006. 2006 was a confusing year for most people amidst the rising stories of loan fraud and growing loan defaults. However, most people wanted to think prices were stable in the Phoenix housing market and real estate investments still had value.
In 2007 foreclosures were exploding all over the valley. By November the Phoenix housing market had an all-time high number of listings of 58,195 and we were in a complete buyers market. Prices starting falling at an alarming rate. They went from $162 per square foot in November 2007 to $104 per square foot in November 2008.
The bottom of the market, in terms of price per square foot, reached $77 in the spring/summer of 2011. There were 100,809 homes sold in 2011 making it the 2nd highest sales year in the history of the Phoenix housing market. The only year with more sales was 2005 when 104,133 home sales were recorded.
The Phoenix housing market started turning into a seller’s market in late 2011 when listings went under 20,000 properties because of the buying frenzy. It became a full-blown seller’s market in the early 2012 . The number of active listings decreased to 12,500 in June 2012. The average price per square foot started going up in mid 2011 and hasn’t stopped, though it is showing signs of leveling.
Now, let’s return to my original statement: The Phoenix housing market appears to be approaching what we could call a normal and balanced market. If you have any doubts refer to my numbers and links above to our Phoenix Housing Tracker and form your own conclusions.
Another source for the Phoenix Housing Tracker