Monday, August 08, 2016

Phoenix Real Estate in July: Sales down 2%, Inventory up 3% YoY

by Bill McBride on 8/08/2016 11:15:00 AM

This is a key housing market to follow since Phoenix saw a large bubble / bust followed by strong investor buying.

Inventory was up 3.3% year-over-year in July.  This is the fifth consecutive months with a YoY increase in inventory, following fifteen consecutive months of YoY declines in Phoenix.  This could be a significant change.

The Arizona Regional Multiple Listing Service (ARMLS) reports (table below):

1) Overall sales in June were down 1.8% year-over-year.

2) Cash Sales (frequently investors) were down to 19.7% of total sales.

3) Active inventory is now up 3.3% year-over-year.  

More inventory (a theme in 2014) - and less investor buying - suggested price increases would slow sharply in 2014.  And prices increases did slow in 2014, only increasing 2.4% according to Case-Shiller.

In 2015, with falling inventory, prices increased a little faster -  Prices were up 6.3% in 2015 according to Case-Shiller.

Now inventory is increasing a little again, and - if this trend continues in Phoenix - price increases will probably slow in Phoenix.    Prices in Phoenix are up 1.5% through May (about a 3.6% annual rate) - slower than in 2015.

July Residential Sales and Inventory, Greater Phoenix Area, ARMLS
  SalesYoY
Change
Sales
Cash
Sales
Percent
Cash
Active
Inventory
YoY
Change
Inventory
Jul-085,9741---------54,5272---
Jul-099,09552.2%3,26935.9%38,024---2
Jul-107,101-21.9%2,90140.9%42,88712.8%
Jul-118,39718.3%3,77945.0%27,663-35.5%
Jul-127,152-14.8%3,21444.9%20,384-26.3%
Jul-138,21414.8%2,94435.8%20,049-1.6%
Jul-146,790-17.3%1,68124.8%27,08135.1%
Jul-157,91516.6%1,73121.9%22,940-15.3%
Jul-167,775-1.8%1,53419.7%23,6953.3%
1 July 2008 does not include manufactured homes, ~100 more
2 July 2008 Inventory includes pending