The market for subdivision homes for sale in Maricopa Arizona is definitely in a state of flux and and the short term future in very uncertain. I had predicted some time ago that the inventory would increase to the 250 level by the end of August but it has reached that number a couple of weeks early. In addiiton, I am beginning to see a decrease in Pending sales and offers on short sales (AWC). Buyer slowdown, with the accompanying rise in inventory, is usually expected during these "dog days" of summer but homes continue to stream onto the market at a steady pace and there has been weakening of values. Let's take a closer look inside the numbers.
ACTIVE: 252, up from 237 Although, as stated previously, an increase in inventory is normal for thye end of summer, this represents an almost 50% increase in less than 60 days. The number of homes being sold at auction (mostly to investors with plans to "flip") along with an increase in traditional sales make up most of this increase. As a result, values have peaked and are beginning to decline slightly due to a slowdown in demand. A number of investors were caught up in the rising values and continued to bid up and purchase auction homes at well above the expected "auction market price". As a result, their inventory of homes for sale has caused enough concern for them to begin to lower prices. Since the return of seasonal buyers is usually not expected to begin for another couple of months, I now estimate that the inventory should easily hit 300 homes before it peaks.
ATIVE SHORT SALES: 20, down from 28 Strangely enough, the number of short sales has decreased. This is further evidence that the increase in inventory is coming form investor flips and traditional sales.
FORECLOSURES: 23, up from 20 At this point, this is not a signifigant increase but I will keep a close eye on this number. There are still a lot of vacant, foreclosed homes in Maricopa that have not yet been put on the market. In addition, the number of distressed mortgages also remains high and many homeowners may soon be headed to foreclosure if they decide not to short sell. If and when the lenders deicde to begin a release of their "shadow" inventory, there will be a signifigant impact on the market regardless of seasonal buying activity.
HUD HOMES: 1, down from 3 This is a very volatile area and there appears to be reasoning behind the release of these foreclosures of government backed loans (VA and FHA). Of course, it IS the government we are talking about here!!
AWC (short sales with offers): 259, down from 271 This is the largest decline we have seen in quite some time. Some of it is most likely due to buyers avoiding them in lieu of more traditional sales and flips since prices are being reduced. Another factor is that many homeowners may have decided to wait to short sell their home until after the "back to school" rush is over.
PENDING: 259, down from 271 This is also a very large decline in an area that has been pretty stable for the past six months. In fact, we have not seen a number this low since the beginning of FEB. Past history has shown that this number continues to decline until after the first of the year. With the Maricopa housing market being so dependent upon out-of-state and Canadian buyers, it is too early to tell what the economy may have in store for us heading into an election year. Only time will tell.
CLOSED: 35, down from 55 Since last weeks number included the end of the month "rush" from July, this is a pretty solid and expected number for this time of year. Closings can vary greatly from week to week due to a number of issues (lender delays, title problems, HOAs, etc) so I tend to focus more on the month end numbers.
ACTIVE RENTALS: 170, up from 161 This is a large increase and I expect it to continue. A number of investors that were buying at the Trustee Sales were doing so in order to secure rental properties. Although this still represents only about two months inventory, prospective (and current) landlords should watch this number closely. Just as with homes for sale, I am beginning to see a number of price reductions which was unheard of just a few months ago.
RENTED: 18, down from 31 Same situation as with closing. There was an inflated number last week due to beginning of the month move ins. This weekly number only represents a slight decline from what I consider normal but it needs to be watched as many potential tenants have already moved prior to the start of the school season.
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