Phoenix Housing Market Tightens Up
For buyers looking for properties in the Phoenix area, it might seem like the market has changed overnight. Media reports have been pumping that “it’s a buyer’s market!” for (literally) years. Indeed, for years that has been true.
However, a look at historical numbers shows that the Phoenix real estate market has been improving for years by at least two measures: new listings and number of units sold.
A look at new listings shows that, with the exception of a slight increase from 2009 to 2010, the number of new listings per year has been declining since 2007. In fact, the annual total of new listings in the Phoenix area was lower than the height of the market in 2005 (in terms of median and average prices).
The chart above represents the supply side of the equation. Now let’s look at demand.
You can see below that 104,725 homes were sold in 2005, then the number of units sold plummeted to much lower levels for the next 5 years. In 2011, the number of homes sold in Greater Phoenix was almost on par with the frenzied year 2005. And 2012 is off to a robust start!
I’ll cover price changes in an upcoming post but, thanks to Economics 101, we can reliably predict that a drop in supply (# of listings) and an increase in demand (units sold) should lead to a corresponding increase in prices.
To be continued…