Housing inventory is creeping up slowly. Let’s take a look at our Phoenix metro real estate report for August 2021. As of August 16, there are 7021 active properties listed across Maricopa County--compare this number to our last report in May. Overall, there is still a housing shortage and based upon demand, it would likely require an increase of 5000 to 7000 homes before the market became a little more balanced.
The problem is that we are still not seeing enough resale listings and not nearly enough new construction. The new construction housing shortage is due to a few factors. One, builders simply cannot keep up with demand and rather than commit to a buyer and then not be able to deliver, home builders are holding back. Another issue is that builders were burned in the last crash and with demand having been strong for so long, many are cautious about overbuilding.
What about foreclosures?
We get asked this question all the time. Will there be a “wave” of foreclosures coming–similar to what we saw in 2008. The short answer is no, but with mortgage forbearance coming to an end soon, there could be a bump in inventory. According to one of our top lenders, the number of homes in forbearance across the nation is nearing 1M and of those, many homeowners are working out loan modifications–of the folks that cannot complete a loan modification, a good portion will be able to sell due to high demand and positive equity in their home. We will likely see a small increase in inventory in the fall due to foreclosures.
Here are some key takeaways for recent MLS statistics:
- 12,404 properties under contract
- 792 “Coming Soon”
- 12,850 sold properties since June 1, 2021
- 27 days on market for recently sold properties
- $264/SF–average price per square foot obtained at sale
The chart below shows how the closed sale price per square foot has changed for Maricopa County since 2019.
According to Mortgage News Daily, the average national 30 year fixed rate mortgage is 2.93%–compare this to 3.14% for 2020. Housing demand has gone down slightly in the past month, but it remains strong. We do expect increased housing inventory over the next few months. Arizona continues to see solid numbers in terms of net migration and for this reason along with attractive financing rates, we feel that housing demand will remain robust–though perhaps not at the same level as we saw a few months ago. Thanks for reviewing our Phoenix metro real estate report for August 2021. If you have a real estate question or need, reach out anytime.