THE VANISHING HOME SUPPLY
It is becoming harder and harder to find the words to adequately describe the extraordinary lack of homes for sale and the unbalanced market it is creating. This phenomena is not confined only to the valley, but is occurring across most of the country as well. If we were old Mother Hubbard we would rightly say the cupboard is bare. It is not excessive demand that is the problem –the real problem is supply. New listings coming to market are arriving at a trickle. That is the problem. Properties for sale are down 61% from this time last year. Combined with still inadequate new build properties, there are simply too few homes for sale to house those who wish to live here. To quote Michael Orr of the Cromford Report:
It is difficult to describe the state of the housing market in Greater Phoenix these days. Just quoting the raw facts makes many people feel you are exaggerating wildly. There are those who seem to believe it cannot really be true when so many people are struggling with their daily lives, battling the worst pandemic we have seen for many decades. However we can only continue to present the facts. The housing market is experiencing moderately strong demand, but this is not the important matter. Variations in demand are almost insignificant. This is because the supply of re-sale homes is so poor it crashes below all time record lows almost every week…
The supply situation is the worst we have ever recorded, lower than the first quarter of 2005, which used to hold the record….
So if inventory is at all time lows, what is going to fix this? The rebalancing will come from additional supply (building) and higher prices. The theory of supply and demand says that prices will rise (as they have 3% in just the last month) and that eventually higher prices will dampen demand. This will happen. The question really is how soon and how high will prices have to go. Correction may take some time. Keep reading our newsletters – we promise to keep you informed on the changes.
Russell & Wendy