Inventory Rises, Prices Hold Steady or Fall in Metro Phoenix
The Arizona Republic reports that the West Valley’s housing market is still sliding, as a storm of increased listings, a drop in the number of recorded sales and a decrease in the median sale prices all brewed in September.
Following a trend throughout metro Phoenix, resales decreased across the West Valley from the same time last year, according to the latest figures from the Arizona Real Estate Center.
The slower resale market comes as good news for buyers seeking to break into home ownership but leaves others wary about future worth.
A sluggish market causes problems for sellers, many of whom are having trouble staying afloat in a sea of listings.
“Sure, if we sold it last April it would have been a piece of cake, but we know that isn’t possible right now,” said Kim Arnold, whose home has been on the market for months. “For us it’s not aggravating because the market is slow and we know the perfect person will come in eventually.”
Her real estate agent, Meredith Andrews, said during last year’s seller’s market, at least 10 people would show up to an open house. At the recent open house at the Arnolds’ home, one visitor arrived. It’s a whole new housing market out there, and one that few people know quite what to make of.
“I do a lot of advertising and the price is competitive but I haven’t had a showing yet. The house is beautiful but there are just so many listings right now,” Andrews said.
Despite the slower market, Andrews sees no reason to panic.
“Generally, sellers who are realistic with pricing and stage their homes well can make a deal. People are still out there buying houses but it just takes a bit longer. Eventually the market will correct itself,” she said.
As fewer people can afford an Arizona home loan big enough to cover the cost of increasingly-expensive homes, demand has been tepid, to say the least. In the West Valley’s three largest cities, the number of homes sold dropped by more than half:
- Glendale’s re-sales slid from 780 to 400
- Peoria’s declined from 470 to 190
- Surprise’s sales dipped from 415 to 190
Median year-to-year sales prices from September fell in every West Valley city except Glendale and Sun City West. Glendale’s median price moved from $240,000 to $247,810 and the price in Sun City West changed from $164,950 to $165,000.
Although September’s numbers point to a buyer’s market, the process of finding the perfect home may be harder with a large number of listings.
“It creates a scenario where it takes buyers longer to make a decision because there’s so much inventory. Without a doubt, people can be more picky in this market,” said Dave Karrick, a real estate agent at Realty Executives in Peoria.
This sharply contrasts to the previous frenzy of 2001-2005, which left many buyers in the dust as investors overspeculated and move-up buyers sought to “flip” a home for its equity, often amidst a storm of home equity loans and risky, adjustable-rate home mortgage activity.
“Many people just gave up, or they settled for something much different than what they sought out to buy,” Karrick said.
Perhaps the biggest change since mid-2005 is the uncertainty of a home’s increase in value. For years, buyers in metro Phoenix assumed if they purchased a house, it would increase in value the next year. The drop in median price leaves many buyers apprehensive about the future.
“That fear is keeping a lot of people on the sidelines. The market has certainly deteriorated and it seems every month it’s getting softer and softer,” Karrick said.
This represents a terrific opportunity for buyers who had previously been priced out of Arizona markets. The rates of mortgage loans remain low and there are plenty of homes on the market, many of which are poised to go down in price. Make your move!