Market Trends in Metro Phoenix - Months of Supply May 2014
Months of Supply is typically a perspective that gives the overall foundation and well-being of the Real Estate market. As the name might indicate, the chart below is a direct reflection of the number of months the Real Estate market would supply the Metro Phoenix area. One may conclude that the more supply that an area has, the better for the market (as, there are always homes that are available for sale) - yet, as in any supply and demand situation, there is a range where this is true. There is a threshold (both low and high) where this number becomes a detriment to the Real Estate market and not a benefit.
The Law of Supply and Demand dictates that when there is too much of one side, the other will benefit. For example, when there are too many homes on the market, Buyers typically will have more say in the purchasing process whereas, conversely, when there are not as many homes on the market, the Seller has more control over the sales process. For the Metro Phoenix area, having an approximate 3-month supply is most efficient (when the number of homes on the market are not as influenced). When there is less of a supply, then the market shifts to the Sellers market and a Buyers market when there is more than a 3-month supply. Keep in mind, this is definitely not the only or the last word regarding a Buyers or Sellers market in the Real Estate industry - so, even though the chart below gives the indication that there is the potential for another shift from a Buyers to Sellers market - there are other factors that come into play in that calculation
- Market Trends in Metro Phoenix - Months of Supply
The good news is that the Valley of the Sun typically has a broader range when it comes to Months of Supply. Because we are continuing to grow as a metropolitan area, we are able to sustain more homes on the market during the months when there are not as many buyers as there are homes on the market - however, that has not been the case in the Metro Phoenix area. As mentioned above, in recent months, the tides have shifted and it has become more of a Buyers market again, as there are a lot more homes on the market than are current buyers. The chart above gives an idea of how most of 2012 and 2013 were mostly Seller's markets, as there were a lot more buyers than there were homes on the market.
In October 2013, we saw an incredible turn-about with the number of homes that were back on the market with solid values attached. Homes that people were excited to move into again and were willing to pay more money for the home of their DREAMS again. Since, we have seen a slight decline in the number of homes in Months of Supply figure, but that is because more homes are selling in the Metro Phoenix area and we are growing!
Don't you just love living in our GREAT city of Phoenix Arizona!!
Market Trends in Metro Phoenix - Months of Supply May 2014
Posted orginally at Phoenix Property Shoppe
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