Monday, March 26, 2007

Phoenix Real Estate - Market Review

From a gut-feeling perspective, it seems like the market is picking up a little bit.  We're getting a lot of phone calls, and traffic through our listings has picked up.  So I was looking forward to pulling my weekly data this morning.  Now that I see the data, I'm hoping this is a case where the uptick in activity just hasn't shown up yet in the numbers, because the statistics aren't pretty.  Here are some examples of what I'm seeing:

  • My number of homes Actively for Sale is up 21% since January 3rd.  Even worse, it has increased every single week since then.

  • My Days Inventory number is up 25% since January 3rd, from 166 to 208.  It has also increased every single week.

  • My 6-month Rolling Average of Sold Homes has decreased 10% over the same time period.

  • My Solds per Expired ratio, measureing how many homes actually sell for every home where the listing contract expires without a sale, has dropped from a near-historic low of 2.11 to an even lower 1.72!

  • My Average Days on the Market for homes Pending Sale has remained fairly stable, hovering around 98 Days.

Looking at these numbers, it's probably foolish to think the worst of the market is behind us.  I'm expecting the rest of this year to be a bumpy ride.  But that doesn't mean the market is going to grind to a halt.  After all, this is Phoenix - a destination city with thousands of new residents moving here every month.  And interest rates are still very favorable.  So what can you do if you're thinking about moving?

If you're moving locally, don't worry so much about the market in general.  You're not going to get as much as you had hoped when selling your home, but you're going to buy your next home at a tremendous discount!

If you're going to sell your home, take the task at hand very seriously.  Make your home the BEST LOOKING home on the block.  Do any deferred maintenance before the sign goes in the yard.  And most of all, price your home right - now is not a good time to float a high price out there just to see if you get any nibbles, because you won't.

If you are selling without buying another house locally, you might want to consider waiting.  What's the market like in the state you're moving too?  If it's also slow, and you can get a good deal there, great.  But if it's more balanced than our market, you'll need to weigh a lower sales price into your analysis about moving.  If you have an estate sale, and the home is paid off, you might want to consider renting it out while our market recovers, then selling it in a year or two.

The Phoenix Real Estate Market is slower than normal, but it hasn't stopped.  There are many reasons for moving, and only a couple of them involve using your home as an investment.  The rest revolve around family dynamics and other, more important matters.  When the time is right, go ahead and move.  Just be sure to plan it out so you can take full advantage of today's market.