starter home analysis

Ok, so last night I did a little bit of digging into Phoenix area housing information:

First I pulled up all of the single family homes, 3 bedroon 1.75 baths, 2 car garage, built since 1970 inside the 101 and 202 loop roads. Basically, I wanted to look at starter homes, within commute distance of Phoenix, not either obvious junk, or homes 100 miles away.

I limited the price to under $200K.

There were 581 available.

Then, I changed the search to closed in the past 30 days. 909. What? we have 2/3 a month inventory of starter homes? that is ridiculously low!

My business partner has been trying to find such a home for his buyer for several weeks, and keeps telling me that “every non junk home gets multiple offers as soon as it hits the market.” Well, seeing this data, I can see why.

Prices are just going to keep rising in Phoenix, until such a day as the supply and demand change by a ton. A balanced market needs about 4 to 6 months inventory.

The other factor, is that in each of those statistics above, roughly 30% of the listings and sales were short sale and or bank owned. With foreclosures and notice of future foreclosures plummeting by over 60% from last year, and inevitably rising values will end slow the short sales, those sources of new inventory are simply not going to exist much longer…


About robertoaribas

Math professor, Realtor. 12 years of buying, selling, investing and managing rental properties. rock-climbing and salsa dancing.
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