by Bill McBride on 2/18/2015 05:30:00 PM
Wednesday, February 18, 2015
For the second consecutive month, inventory was down year-over-year in Phoenix. This is a significant change.
This is a key distressed market to follow since Phoenix saw a large bubble / bust followed by strong investor buying. These key markets hopefully show us changes in trends for sales and inventory.
The Arizona Regional Multiple Listing Service (ARMLS) reports (table below):
1) Overall sales in January were down 0.3% year-over-year.
2) Cash Sales (frequently investors) were down about 12% to 32.0% of total sales. Non-cash sales were up 6.4% year-over-year.
3) Active inventory is now down 4.9% year-over-year. Note: House prices bottomed in Phoenix in 2011 at about the current level of inventory.
More inventory (a theme in 2014) - and less investor buying - suggested price increases would slow sharply in 2014. And prices increases did slow.
According to Case-Shiller, Phoenix house prices bottomed in August 2011 (mostly flat for all of 2011), and then increased 23% in 2012, and another 15% in 2013. Those large increases were probably due to investor buying, low inventory and some bounce back from the steep price declines in 2007 through 2010. With more inventory, price increases flattened out in 2014.
As an example, the Phoenix Case-Shiller index through November shows prices up less than 2% in 2014, and the Zillow index shows Phoenix prices up 2.4% over the last year.
Now, with falling inventory, prices might increase a little faster in 2015 (something to watch if inventory continues to decline).
|January Residential Sales and Inventory, Greater Phoenix Area, ARMLS|
|1 January 2008 probably included pending listings|