Arizona Market Update- Inventory is not whats driving us.
So what's the issue with Arizona's market? Is it a buyers. market or a sellers market? Rumor has it, the lack of inventory is driving prices up and create a housing frenzy.
Well, that's all good, theoretically, but here's the facts. I did a search, researching the month of September from 2017 to 2020 to give you the cold hard facts of what our market situation is, and I am betting this is going to surprise you.
The criteria used was simple, single family homes, patio homes, townhouses and condos, in both Maricopa and Pinal Counties (our two largest in the valley) with nothing else dictated. Here is what the numbers showed, and we all know, numbers don't lie:
September 2017, 654 units closed.
September 2018, 633 units closed.
September 2019, 814 units closed.
September 2020, 951 units closed.
So if we're low on inventory, explain how our closed units went up for the past two years. In fact, from the number, 2017-2018 (month of September) looked like "lack of inventory" caused less closings.
Everyone wants to say it lack of inventory that is driving our market at the moment, its simply not the case. The fact we have over 7,100 active properties for sale, ranging from a low of $45,000 to a high of $27M is proof its not low inventory. Now looking at the 7,100 plus active, lets tweak that a bit by adding some pricing parameters, $0 to $500,000 we have 3,972 units for sale, from $500k to $1M, 1,878 units and $1M to $5M, we have 1,221 units for sale. If you're wondering where the remaining unit are, they all exceed $5M in price.
SIDE BY SIDE comparison of inventory numbers.
This obviously poses the question, what is driving our market then? Couple reasons why we are seeing a strong sellers market. Rates are still at historic lows. IE, When I first got into Real Estate (21 years ago) the interest rates were around 8-9%, in fact, my first mortgage rate was 8.375 and I had good credit.
Relocation. We are seeing a mass amount of buyers coming from states like California and Illinois.
Entry level homes. This are hard to come by right now. If you don't understand what an entry level home is, its simple, its a smaller home, 3 to 4 bedrooms, under 1,600 square feet with or without a 2 car garage. These are typically priced within the. FHA approval range, $340k or less. These home owners, are staying put. They see what the next level home is and are opting to stay put a little longer.
COVID-19. Did it have an impact? Sure. But not how you think. This showed home owners they were living a space way too small or much too big. Some didn't like the larger lots now that they were living/working from home. Same is true for those with smaller lots, realizing, there is no room for kids and family pets to have space. This caused internal moves within the various cities in both counties. Not the mention the normal moving in and out of school districts.
All that being said, its always been a good time to buy or sell in Arizona. My business hasn't dropped off at all, just closed my 36th transaction of the year. My normal production range lies between 40-50 annually.
If you're ready to sell your home and wanting to know its value, reach out here.
If you're ready to start the Home Buying Process, wonderful, I can help with that too. Click here to get that process started, I am with you from start to finish as well!
The Real Estate Guy™
"Equal Housing Opportunity"
Brokered by eXp Realty Arizona