Sometimes I can't help but disagree with information in the paper
by Kaushik Sirkar, Chandler AZ REALTOR
Chandler Arizona Real Estate
This article was published in today's Arizona Republic. In general, a nice enough article about the current state of the Phoenix metropolitan Real Estate market. Inventory is high. Both the home and the neighborhood need to be in good shape for 'sellability'. It is difficult for resale homes to compete with builder incentives. All things that we have heard before. What caught my attention in this article was the claim (I believe by a local Realtor, accepted by the author) that the valley's market currently has 20-25% more inventory 'than it needs'. Now, I won't argue this number if some data is provided to backup the claim. Or is this just an arbitrary statement by one agent? The agent also suggests that it will take 9-12 months to clear the 'excess' inventory. I believe I heard the same arguement about a year ago...well inventories are even higher now!
Lets look at the numbers for a second. Valleywide, we have over 52,000 homes on the market. A traditional (based on averages from recent history) suggests 20,000-25,000 homes on the market. Reducing 52,000 by 20-25% doesn't get us to that number. Not even close. Lets look at some more numbers courtesy of ARMLS....
First we have total sales by year
- 62,414 - 2001
- 67,950 - 2002
- 80,052 - 2003
- 98,922 - 2004
- 104,725 - 2005
- 74,486 - 2006
Second we have annual total listings
- 114,402 - 2001
- 125,738 - 2002
- 133,424 - 2003
- 127,625 - 2004
- 143,988 - 2005
- 173,363 - 2006
Guess what? Listings are going up. For 2007, we are on pace to AT LEAST equal the # of listings from 2006, if not surpass them. Unfortunately, sales are likely not (at the current pace) going to match 2006's pace - they are going down! If anything, it looks like we are going to fall somewhere in the 2001/2002 regime. This suggests, to me, that excess inventory is unlikely to clear in the next 9-12 months unless we see a shift in paradigm, ie only serious sellers putting their homes up for sale. Everyone who is 'fishing' - wrong pond, wrong time. Agents obviously contribute to this....don't buy listings, don't prod people to list unless they are willing to list at a price that will draw offers.
Folks, I don't have a crystal ball and certainly don't claim to be able to predict the future. Sales may pick up, stay the same, or get worse. I guess I just have issues with others that throw out potentially flippant remarks about the market and don't even try to back up those remarks with fundamentals.
Thoughts?
Thanks for Reading :)
Kaushik Sirkar, Chandler AZ REALTOR
http://www.homesphx.com
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