Tempe, AZ Real Estate Market Update - October 2013
As you can see from all of the red arrows, the overall Tempe, AZ Real Estate Market is cooling off. Active Listings are the highest they've been in more than two years. UCB (Under Contract accepting Backups) are down and Pending Listings are up 17% month over month but down 40% over the past two years.
Sales per month are down 17% month over month but down 38% over the past 3 months. DOM (Days On Market) is up 7% month over month and up 26% over the previous quarter. Days of Inventory, an indicator of how balanced our market is, stands at 98 days. 98 Days is still a sellers market. As Days of Inventory increases we come closer and closer to a market that will favor neither buyers or sellers.
These are strong indicators that the overall Tempe, AZ Real Estate Market while still a sellers market is continuing to cool and I believe we'll see more of the same in November and December. I wouldn't be surprised to see Tempe's Days of Inventory at 120 or more by the end of December.
Contract Ratio* is a great way to determine where the market is at. Is it hot, cold, a buyers market a sellers market? Tempe, AZ is a market in transition and over the past 60 days has moved into a "normal" market. So you can better understand what the current number of 39.0 means I've included a definition towards the bottom of this post.
Tempe, AZ Short Sales (SS) and Lender Owned (REO) properties are still being absorbed almost as fast as they come on the market and together make up less than 11% of active listings and less than 12% of sold listings for the month of October 2013.
What Does This Mean For Tempe, AZ Buyers & Sellers?
- If you are thinking of buying a home in Tempe, AZ, AZ in the next year or two, don't wait, while the supply of available homes is rising, and Tempe is quickly moving to a balanced market until the market begins to cool home prices will continue to rise, not as quickly as they have over the past 3 years, but they will rise and the historically low mortgage interest rates we currently enjoy have nowhere to go but up. Buy now.
- If you are thinking of selling your Tempe, AZ home in the next 12 months list it now, competition (other active listings) is still relatively low in many neighborhoods in Tempe, AZ . And in January tougher lending guidelines will shrink the number of qualified buyers. Take advantage of the market we currently enjoy it won't last much longer.
- Buyers who bought a home in Tempe, AZ a year ago have seen as much as a 20% increase in value. I believe we are going to look back on 2013 much as we do 2012, a year of great opportunity. Will you take advantage of the opportunity?
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*Contract Ratio - "indicates how "hot" a market is. It specifically measures the number of completed sales contracts relative to the supply of active listings. It is defined as 100 x (Pending Listings + UCB Listings) / Active Listings Excluding UCB.
The higher the number the greater the buying activity relative to supply. If this number rises then it is a sign of growing contract activity and a positive signal for sellers. Conversely a falling number is a sign of a weakening market - either supply of active listings is increasing or contract activity is slowing, or both.
In a balanced market for normal market segments, the value of the Contract Ratio is usually between 30 and 60. When it lies below 20 the market can be considered "slow" or a "cold market". Above 60 can be considered a "hot market" and when it moves above 100 we regard this as evidence of a "buying frenzy". In high-end luxury market segments the normal level is lower, usually lying between 15 and 25."
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Dashboard Illustration courtesy of The Cromford Report
Please Note:All statistics and figures are reported from the Arizona Regional Multiple Listing Service (ARMLS)
and/or The Cromford Report and are deemed to be reliable, but cannot be guaranteed for accuracy.
It is recommended that any information of special interest be verified through independent sources.
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