We all speculated that the market would slow for a few months after expiration of the first-time home buyer’s tax credit, and we were right. Most of us in the industry expected to see number of listings available increase, especially in the below $200k price range where a majority of first-time home buyers tend to purchase.  In fact our supply of available listings on the market listed at $200k or less has increased from 13,133 listings to now over 17,126 listings since May 1, 2010.  That is a 23.3% Increase in the last 3 months  of available inventory.  Although 23% increase in one quarter is a lot, most of us were expecting to see a substantial increase here in our Phoenix market, so we are not alarmed at this figure.

Now lets look at the homes between $200k and $500k.  In that price range we have seen a slight decrease in  listing inventory since May 1, 2010 from 7,275 down to 6,824 units or a 6% decrease.  Interesting.  This is a segment of the market where the first-time home buyers are phasing out price-range wise.  Even though the end of the first-time home buyer credit should have impacted a percentage of potential buyers in this price range, it wasn’t enough of an impact to increase inventory.

Examining the $500k to $1million dollar price point, we see a much different picture.  One that I have to admit, I am still a little baffled at.  The current number of listings for homes between $500k to $1million dollars has DECREASED by a whopping  20% since May 1, 2010 from 2,399 units to 1,999 units.  So, are more people just cancelling their listings or not listing at all in this price range or are we actually seeing more closed sales then the quarter and year prior?  We are indeed seeing more closed sales.  Closed sales are up over 6% from last quarter and almost 15% from this time last year. Our current Supply of homes in the $500-600k price range has decreased from over 400 days to almost half of that at 220 days.  The appreciation for the year is currently at about 2%.  Again, for the first time in years, we have seen a positive appreciation in this price range.

The housing market for the Homes listed at $1million and up are much the same story.  Listing inventory has decreased 19% from 1751 listings to currently 1418 listings.   

So the million dollar question

WHAT DOES IT MEAN??  

Could our luxury market be normalizing again?   Could this part of the market, that was untouched by the governments efforts to ‘stimulate’ the housing market, be in the slow correction that leads to a normalized market?  The statistics for the Greater Phoenix Metropolitan area would lead us to believe so for now.  Let’s see what happens and watch if the trend continues.

All statistics were gathered from Cromford Report and Arizona Regional Multiple Listing Service (ARMLS) and are believed to be accurate.