Inventory of subdivision homes for sale in Maricopa Arizona rose by almost 10% in the past week. This occured in spite of continued demand by buyers. Althopugh it is too early to say whether or not this is a trend, I have been predicting for quite some time that Maricopa AZ would experience a “softening” of values and increase in inventory during the summer months. Here is the breakdown of the numbers.
ACTIVE: 162, up from 150 This is the hioghest inventory we have seen since FEB 2012. As you will see, this increase occured across the board in the various categories. Since buying activity remained steady, I have to assume that the increase is due to more homeowners deciding to short sale their home coupled with additonal foreclosure releases by the lenders. Values remain very high but, if this trend continues, it is only a matter of time before investors (who own the bulk of the inventory as “flips”) get a little nervous and begin to lower their prices ot accept below list price offers.
ACTIVE SHORT SALES: 26, up from 17 This also is the highest number since FEB and very well may be due to distressed homeowners “pulling the trigger” and deciding to short sell their home while schools are out of session. Unless we see a “flood” of new short sales, I would not expect this number to increase dratically as many agents/investors have entered this marketplace and are offering on most new listings. Obviously, they have a lower threshold in regards to price so this could still present an opportunity for the owner occupant.
LENDER OWNED: 19, up from 13 Once again, highest number since FEB. The $1M question is: Are the lenders finally taking a more aggressive approach and releasing some of theiur pent up shadow inventory? Many believe that they are in response to the “national” buying season. Although Arizona’s high season occurs in the winter when the seasonal buyers are in town, most of the country experiences their high season during the summer (and better weather). It wouldn’t surprise me a bit if the lenders ignore (are unaware of) the seasonal differences in certain markets and just treat all foreclosure releases the same. This is very apparent as they did not respond to demand back in the spring when they could have received maximum ROI for their inventory. Another thing to be aware of is that when, in fact, the lenders do release more homes, the values will most likely be based on the higher “comps” of the past few months as appraisals/BPOs (agent appraisals) will be based on sales from the last 90 days. I expect pricing on forecosyres to lag behind the actual market values for the next few months. This will be an area to watch closely.
HUD HOMES: 6, up from 0 These government backed foreclosures (FHA and VA loans) have begun to appear in much greater numbers than the previous months. Investors and seasonal buyers cannot bid on these homes until they have been on the market for 30 days so if, in fact, HUD continue to increase, this will present a buying opportunity for those looking for a primary residence.
AWC (short sales with offers): 206, stable from 210 There is still a strong market for these homes due to lack of inventory coupled with investor buying. Most are receiving multiple offers in the first few days. Since the lenders are not involved in the pricing or the selection of an offer, the listing agent (and owner) is in total control of which offer they accept regardless of the offer price. There have been a number of transactions that borderline on being unethical but because this is such a “grey” area with the Dept. of Real Estate, there is not a lot that can be done. This is causing quite a bit of frustration for traditional buyers to say the least.
PENDING: 290, down from 307 Although this was a decrease, it is still well within the range of the past few months and is as high as most numbers form the Spring, when seasonal buyers were here. Demand is still strong and the fact that invenmtory took a jump in spite of this shows that a LOT more homes are coming onto the market. Patti and I have seen a slight increase in buyer inquiries so the summer season may not see much of a decrease. That being said, there appears to be less lockbox activity Valley-wide so we’ll just have to wait to see how it all plays out. This is the key area that I watch as it is an indicator of demand and will keep the inventory in check if it persists. If Pending ales begins to decrease and is coupled with a continued increase in inventory, the “perfect storm” will happen this summer and values will stabilize or even decline. It’s all about supply and demand!
CLOSED: 51, up from 32 Another strong number although it is inflated a bit due to the end of the month flurrly of closings. Even so, it is a strong end of the month number, expecially for this time of year.
MAY CLOSINGS: 173, down from 211 This is a pretty solid number for this time of year. Although the May closings from last year were 235, there were over 400 homes in inventory when those offers were made. Patti and I (and I’m sure many of the other agents) have a number of willing and able buyers but are unable to find them homes with the inventory the way it is. The stable number of Pending sales should keep the closing numbers pretty consistent for at least the month of June.
ACTIVE RENTALS: 121, down from 129 After a brief upsurge, the number of rental untis available has settled back down for the meantime.
LEASE STARTS: 49, up from 21 Although this number is inflated due to the 1st of the month move ins, it is still a very strong number. This is to be expected as there tends to be a lot of movement while school is out.
MAY LEASE STARTS: 69, down from 100 Something is wrong with this number as the prior weeks indicate that this number should be a lot higher. I have rechecked my search parameters a number of times and will continue to research the problem and respost if I find it. I would ignore this number for now.
View the full spreadsheet: Monthly home data