Phoenix Real Estate Inventory Levels Hold Steady (June 2010)

Phoenix, AZ – One way to gauge how the real estate market is doing is to pay attention to the inventory levels. We measure this in “months supply”. What this means if not one more home came on the market it would take “X” number of months to clear out the inventory based on supply (the number of homes for sale) and demand (how many homes have sold in the previous months.

Looking at the June 2010 statistics we are holding steady at just over 4 months of inventory in the Phoenix AZ Real Estate market. Our inventory levels have remained fairly consistent over the previous year keeping us in the balance market range. A balance market is when we have between 4 and 6 months inventory. A seller’s market is defined as less than 4 months supply while a buyer’s market is when there is 7 or more months supply of homes. A few years ago Phoenix was a huge buyer’s market with over 20 months supply of homes, but prices have come down around 50% since the peek of the market and many people have taken advantage of the low prices and low interest rates.

Keep in mind that every neighborhood is different and to find out what the local trends are in your neighborhood contact:

Realty Executives



Average Phoenix Home Prices Rise 3.23% in one month!

Phoenix, AZ – According to the Arizona Regional MLS the average home price in the Phoenix area rose 3.23% comparing May 2010 to June 2010.
Fireworks over Phoenix and home prices were exploding as June saw an increase of 3.23% in the average sales price over the prior month to $188,568. This is 14% higher than our low of $165,298 back in March of 2009.  This is good news for Sellers as the bank owned properties are decreasing in the market.  However Sellers do need to be cautious as more Short Sale properties enter the market and increase competition.  Buyers who are waiting for prices to drop need to be alert as to the trends. For buyers who are waiting for prices to drop, this trend shows that for the past 6 months, average prices have been higher than our 36-month low in 2009. Investors and savvy buyers continue to understand the value the current market offers. Combined with the current interest rates and financing options available to them, they are making decisions that have allowed them to take advantage of the affordability the current market continues to provide.

If you are thinking about buying a home in the Phoenix area
or selling a home in the Phoenix area contact:


Phoenix Average Home Sales Price June 2010 36month Trend


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Phoenix – Where have all of the Sellers gone? (Sam The Sitter and Mary The Mover)

Phoenix AZ – Where have all of the Sellers gone?

Phoenix AZ Downtown

This is definitely a different real estate market compared to 5 years ago (2005). Back in 2005 the Phoenix Real Estate market was hotter than an afternoon bar-b-que on the 4th of July in Phoenix. Home inventory levels were low, seller’s were receiving multiple offers on their home, above list price and everything was good for Sellers. Buyers on the other hand were just “hoping” they could get a house, any house that would fit their needs.

Fast forward to 2010 and home prices have dropped 30, 40 even up to 50% in some areas of the valley and their are very few what we call Normal Home Sellers (a seller who has equity and wants or needs to move). Taking a look at today’s ARMLS (Phoenix MLS) numbers on Single Family Detached Homes for July 3, 2010 here is what we have:

34,189 ACTIVE (Homes For Sale)
5,950 BANK OWNED (Foreclosures) 17.4%
14,647 N/A (Usually Normal Sellers) 42.8%
3,971 OTHER (Divorce, Corp Relocation, Age Restricted Communities) 11.6%


Wow only 17.4% of the homes are bank owned foreclosures for sale, but look at the Short Sale number at 28.1% that is huge. When a homeowner is facing a hardship (job loss, cut in wages, medical conditions, death in family etc…) and they are going to start to fall behind on mortgage payments, they often do not know where to turn and 7 out of 10 do nothing and let their home go into foreclosure. If you or anyone you know if falling behind on mortgage payments or about to here are some resource websites they should look into:


Taking a look at the N/A or NORMAL SELLER category of 14,647 homes or 42.8% of the market is a little misleading. I personally estimate at least 33% of these homes are investors who have purchased a home for cash at a foreclosure auction, spent $500 to $50,000 to fix it up very nice and have put it back on the market in the N/A or NORMAL SELLER category. This leaves us only around 9,700 NORMAL “Real” Sellers in today’s market.


If you asked the normal person on the street or in the grocery store this weekend “How is the real estate market”? You would probably get answers like “horrible”, “Really bad there are so many foreclosures for sale”, “I don’t know” and “Not good because there are too many homes on the market”. Here is the REALITY – We need more NORMAL Sellers. Lets look at some more numbers:

34,189 ACTIVE (Homes For Sale)
10,410 PENDING (Under Contract Waiting To Close)
17,684 PENDING (Adding in Short Sale & Contingency Homes)
9.274 CLOSED (June 2010)

If you take the number of homes CLOSED divided by the number of ACTIVE homes you get the absorption rate (how many months it takes to deplete the supply of homes) or SUPPLY RATE of 3.7 months comparing CLOSED homes and if you look ahead to the PENDING you would get 3.3% months and if you looked even further into adding in the PENDING with Short Sale & Contingency Homes we have a 1.9 months supply of homes available. What does all this mean? It means we have a LOW SUPPLY OF HOMES For Sale and INTEREST RATES are at an all time low!

WHY SHOULD A SELLER… SELL NOW? (Sam The Sitter vs. Mary The Mover)

Why should a Seller… sell now? Good question. A Seller should only sell now if they 1) absolutely have to sell (Short Sale, job relocation, just had twins and out of bedrooms, etc…) or they 2) absolutely want to sell. Now maybe a great time to MOVE UP to that BIGGER home that you need or really, really want. If you have equity (not upside down – many homeowners still do) and sell now when prices are low, you are also buying now when prices are low. If your home is worth $150,000 now and you buy a $250,000 home now you are making a MOVE UP. Let’s say home prices go up 33% in the next 5 years (we can never predict the future but in my opinion homes are at least 33% under value right now in Phoenix) what happens to “Sam The Sitter” and “Mary The Mover”? Sam The Sitter says “I’m not selling now, it’s not a good time, I will wait until prices go up”. Mary says hmmm… “If I sell now, I can move up to that bigger home that I really need”. So let’s look at the numbers.

2010 – Sam The Sitter and Mary The Mover’s homes are each worth $150,000 and they have no mortgage.
Mary decides to Sell pays her closing fees in cash out of pocket and Move up to a bigger home worth $250,000 in the Summer of 2010 and takes out a $100,000 mortgage at today’s low interest rates (I have been quoted 4.5% for a 15 year note) giving Mary a principal and interest payment of $506 a month (example only).

Fast forward 5 years later…. (Home prices go up 50%)

2015 – Mary The Mover’s home is now worth $375,000

2015 Sam The Sitter’s home is now worth $225,000 and he wants to buy in the same neighborhood as Mary the same $375,000 home. So he sells his home for $225,000 pays his closing fees in cash out of pocket and now has to take out a $150,000 mortgage at the 2015 interest rate of 7.5% so his payment is $1,048 a month compared to Mary’s $506 a month (WOW WHAT A DIFFERENCE)

Homes Are ON SALE, INTEREST RATES are extremely low!

Now is possibly one of the greatest times to Sell Your Home… if you really have a need.

If you are thinking of selling and want to know what your Phoenix Area home is worth here is free quick over-the-net home evaluation that will help you determine what the market might pay for your home: What’s My Phoenix Are Home Worth (Free Evaluation) CLICK HERE

Ready to make a move? Give me a call at 602-750-1744 and I will take the time to go over all the details in a free, no obligation consultation. DONALD KEYS is a professional REALTOR here in the valley since 1997 and helps Buyers and Sellers.  You can visit his website at