There are a few key indicators to the health and direction of a real estate market–those are interest rates, available inventory and the contract ratio. The contract ratio for the Phoenix metro area is currently 34% which means that 34% of the available homes are under contract. Housing inventory has been going up for quite some time with only a few periods of decline. As of mid-March, there are currently 24,853 available properties for sale–compare this to January’s figure of 22,258. The active inventory has been on the market for an average of 85 days. The charts below highlight the change in available housing inventory over the past two years along with the closed sales over the past two years–inventory is rising and sales are falling:
There are currently 8621 pending sales and 836 “coming soon” listings. From February 1 to February 28, there have been 5801 sales–here are MLS stats for recently closed sales:
- Average days on market: 79
- Average sold price per square foot: $413
- Average list to sale price ratio: .98
Market Summary
Although the City of Phoenix is moving into a balanced market, cities/towns on the outskirts (with only one exception) are experiencing buyer’s markets. A few areas are still in what we’d call a weak sellers market, but it does appear that the county overall is moving into balance or in some areas, favoring buyers. Interest rates remain quite high and this metric means that many would-be buyers are left on the sidelines. The chart below highlights changes in the interest rates over the past 20 years:
Buyers have more options than before and this is leading to more seller concessions for repairs, closing costs and things like 2-1 rate buy-downs. There are always exceptions, but we see the market (overall) favoring buyers. Serious sellers need to price appropriately and have their homes in tip-top condition in order to compete. With summer approaching, we may see decreased sales and possibly more available inventory.
