What Does an Increase in Real Estate Inventory Mean for You?

Following the lead of the nation as a whole, our state saw a slight increase in Real Estate inventory last month. For Arizona at least, this is noteworthy. I suppose logic would suggest that inventory has been so low for so long that a rise was inevitable, but my feeling is that a market jump in January is abnormal. Not to say that it’s a bad thing, just out of the ordinary. It’s certainly a welcome development for home buyers.

Within the Greater Phoenix Valley, single family residential homes below the $250,000 mark are still selling at a very brisk pace. Home Buyers in this price range are competing with investors for rental properties and fix-and-flips. The overall median Days-on-Market, for all price ranges in the East Valley, falls somewhere around 49 days.

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Even considering the recent boost in homes for sale, from the perspective of home sellers, things are still looking good. There is a predictable, organic rise in home prices, and interest rates have dropped yet again, motivating more home buyers to enter the market.

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As for home prices, according to Zillow (see chart below), Phoenix median home prices are up 7.4 percent over last year, and lower than 1/2 of the country’s other major metropolitan areas.

For-Sale Homes Inch up, a First for a January in a Long Time

By Suzanne De Vita

For-sale home inventory is steadily ticking up, gradually growing for four of the last five months, according to new research by Zillow.

This January, there were 1.2 percent more homes on the market nationally than there were in Jan. 2018, accounting for 19,455 additional listings, according to the latest real estate report by Zillow. There hasn’t been an increase in a January, when activity is historically slower, since 2014, and possibly even prior to then (Zillow began collecting data in Jan. 2013).

According to the January Zillow Home Value Index, the median national price was $225,300, which is 7.5 percent higher than it was in Jan. 2018—a figure that, notably, hasn’t significantly swung in two years.

Zillow Jan. 2019 Real Estate Market Report

Is It Enough to Move the Needle?
Not quite—but it’s a start. With absent inventory levels in recent years, buyers are continuing to face limited options, and for the foreseeable future, the competition for homes will remain stiff.

“For four years, it felt like homebuyers couldn’t catch a break as for-sale inventory became tighter and tighter with each passing month,” says Aaron Terrazas, senior economist at Zillow. “During the second half of 2018, something shifted. Homebuyers aren’t out of the woods yet, but there is a glimmer of light on the horizon. The number of homes on the market is hesitantly inching higher, now approaching the highest level in a year and a half. In the priciest markets, the jump has been even more definitive.

“Buyers should not mistake a few more options for a sudden bounty,” Terrazas says. “With home values still increasing at a steady clip, it’s clear that demand still outstrips supply, and with mortgage rates down from recent highs, the first quarter of 2019 is shaping up to be more competitive than the lull we saw as 2018 came to a close.”

For more information, please visit www.zillow.com. Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. Reprinted with permission from RISMedia. ©2019. All rights reserved.