Data extracted from the Arizona Regional Multiple Listing Service (ARMLS):
Active listings = 53,145
Active With Contingencies (AWC) = 892
Pending listings = 6,575
Sold listings (past 30 days) = 5,725
See this post for explanations of these terms
Here's an interesting look at "Days on Market" (DOM) — how long a home has been listed for sale in the MLS.
Number of homes with a DOM greater than or equal to:
180 days = 10,962
270 days = 5,008
365 days = 1,905
730 days = 44
1,095 days = 4
Note, these numbers are "inclusive". ie: the 1,905 homes with a DOM > 365 days are also included in the 10,962 homes with a DOM > 180 days. Make sense?
So what does this all mean?
The easy answer would be, "it means this is a buyer's market".
But what does THAT mean?
Does it simply mean, "now is a great time to buy a house"? Does it mean, "if you don't buy now you're missing out"? Does it mean, "you can't sell a house in this market"?
The answer to all of those questions is…. maybe, maybe not. Let's look at each answer:
Now is a great time to buy a house: Fact: There is a tremendous selection of homes available for purchase. Fact: Mortgage rates are still near historical lows. Fact: Many sellers are willing to negotiate. Fact: Builders are offering great incentives. So is now a great time to buy a house? Maybe, maybe not. I can't answer that question for anyone because it depends on your personal situation. Now may be a terrible time to buy a house — for YOU. Now may be the best opportunity in your lifetime to buy a house — for YOU. We can certainly talk, we'll tell you everything we know to help you decide if now is the time for you.
If you don't buy now, you're missing out: Will prices continue to fall or start rising again? Will mortgage rates go up? Maybe, maybe not! Here's the honest truth — I DON'T KNOW. And any agent, broker, loan officer, housing bubblehead, financial advisor, or any other human being that claims to know is full of it. NO ONE KNOWS. Sure, there are indicators for all of these things. There are predictions that can be made. But predictions can be wrong. It's important to understand the market, and the trends and predictions. But it's equally important to realize that no one, anywhere, can make any promises about what may happen in the near or long term future.
You can't sell a house in this market: This one is actually the easiest to answer — sort of. ANY home can be sold, in ANY market. Pricing is the single most important factor in selling a home, particularly in this market. If a home is priced correctly, it will sell. Now that being said, I'd be shoving my head in the sand and not doing my job if I didn't realize that the price you can actually sell your home for may not be enough for you to be able to afford to sell it. If you owe more on your home than it can be sold for, you probably can't afford to sell it. If you need some fixed amount of profit for whatever reason, then you may not be able to afford to sell. Can YOU afford to sell? Again, I don't know. The answer to that is different for every individual. All I can say for sure is we won't mislead you. If you want to list your house with us, and you tell us you HAVE to net X amount of dollars, then we'll sit down and figure out if you can. The math isn't difficult if you are familiar with closing costs and know the price your home can sell for. Be advised, some agents will "buy" your listing — telling you that they will list it at any price you want. In that case, of course you can list the home for what you need. But listing your home for a certain price and selling your home for that price are two completely different things. We won't list your house for a price it can't be sold for. What is the point in doing that? It's a waste of your time, and our time — we both have better things to do.
[tags]Phoenix real estate statistics, Phoenix real estate market, buyers market, Phoenix MLS[/tags]
The Phoenix Real Estate Guy was started by Jay Thompson, and I have a little blogging problem... he liked to say...
Wow!! How do you ever convince a buyer that they should stop looking?
Sometimes it's not easy Norm!
Maybe this is a bit of an oversimplification, but isn't the definition of a buyers/sellers market the difference between the raw historical (6mo, 1yr, 3yr, etc..) ratio of homes sold (& for what amount) versus total active listings on the market, when compared with current statistics? Makes sense to me.
I think you need to give consumers/homeowners a bit more credit for their basic knowledge of the market. Everyone knows that the past 4-5 years have seen a tremendous rise in home values. But homeowners can also recognize when the market slows down, all they have to do is look in their own neighborhood: "well, Bill has had that for sale sign up for 3 months now but his neighbor Mike sold his home within 1 week not 2 years ago." It's probably a bad example, but you get the idea.
It's a buyers market. First time home buyers especially ought to be looking for houses right now, because when compared to the last few years there are much better deals to be had. Will prices continue to drop? Maybe, maybe not. But it is logical to assume that much of gains from the last few years have been speculator driven, dried up, and thus are not likely to continue on this unprecedented tear. The bottom may get a little lower, but the market overall is 20,000 leagues from the crest of the wave.
Will – yes, that's the book definition of a buyers/sellers market. The point I was trying to make is that there are too many factors that go into a home buying/selling decision to paint it with a broad label of "buyers market". It simply isn't and can't be the best time for everyone to buy.
"I think you need to give consumers/homeowners a bit more credit for their basic knowledge of the market."
Didn't mean to imply anything about consumers knowledge. Consumers are generally *very* savvy and knowledgeable about the market. But we get questions on almost a daily basis that we simply can't answer. "Will this house go up in value?", "Has the market bottomed out?", "Are rates going to go up?" Things like that. We can give our OPINION, but many folks want facts/promises and we just can't do that. No one can.
I agree with your last paragraph, generally speaking. Now is a great time to buy for MANY people. But it is not a great time to buy for EVERY person.
I like this type of post. Only because I receive the exact same sort of questions on a weekly basis. I used to own a restaurant a few years back and, just as frequntly, one of my employees would ask, "do you think we'll be busy today?" My reply was usually, "If I knew that I would would probably be sitting on my yacht sipping Champagne right now." The same goes for any market, whether homes or pork belly commodities. Nobody can predict the future.
The thing about real estate, for most people, is that you can enjoy your investment until the time comes to reap the rewards of appreciation. With some smart loan handling it can lead to a tidy sum.
Yes, now is a good time to buy if a buyer has been contemplating the idea over the past few months. If finances are in line and the only decision to be made is whether now is a good time or not, buy now. Don't look back. I still hear more stories from people in my area who regret not buying a home than I do of people who did – with a ratio of about 100 to 1.