Attention: This is NOT a Buyer’s Market!
August 10, 2009 by Kristin LaVanway · Leave a Comment
Last year, here in Phoenix, it was a Buyer’s market. This year it is a Seller’s market. Plain and simple. But that message seems to get lost in all the media hype about foreclosures and short sales, and desperation and reports that the sky is falling. So, without any hype, without any fanfare, here are the facts:
Months of Inventory: The magic number is 6 months – that’s a balanced market. Right now, there are 4.2 months worth of inventory in Metro Phoenix. Last month, there was 5 mths worth of inventory and last year there was 9.2 months worth of inventory. Conclusion: there are not enough houses to go around.
Pending Sales vs Closed Sales: Right now, the ratio of pending sales to closed sales is 74%. Last quarter, that number was 62%. Last year, the ratio was 85% and 2 years ago, that number was 97%. Pending sales are an indicator of future sales and the growing disparity between pending sales and actual sales suggests that a larger number of pending sales are falling out. Difficulty with financing is one the big reasons for cancelled sales. Conclusion: Get your financing squared away before you go shopping.
Foreclosures – Everyone wants them: Foreclosures represent 14% of the inventory and 55% of the sales. Think about that for a minute. How is that possible? Because foreclosures sell in a matter of days…everyone wants them. An interesting stat: we are on track for 48,809 foreclosure sales this year compared to the 902 sold in 2007. Scary. Conclusion: Don’t limit yourself to foreclosures…shop for the home not the hype.
Short Sales: 48% of short sales close. Better than last year, but still a 50/50 shot. And many short sales are receiving multiple offers within a week or so of listing.
So, buyers, if you want to successfully purchase a home in this market, BE PREPARED!
***Do not go shopping until you have your financing secured.
***Be realistic in your expectations – don’t expect to buy the Taj Mahal for $80K!
***Make you first offer your strongest – this is not a Swap Meet!
***Be proactive – many houses sell with multiple offers within a few days!
You can still get a great bargain…it just takes a little effort and lots of patience!
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I am a Realtor in Gilbert, AZ, working with clients throughout the Phoenix Metro area. I am lucky to love what I do and appreciate the difference I can make in people's lives.
In a previous life, I was a rocket scientist - really! - but decided to step away from corporate America to be a Mom to my four boys. Found it hard to do bake sales, so I ran a small independent programming business instead.
Flash forward...I am now a single mom and I face many, many challenges everyday. I am living through the hardships that many are facing in this economy. These experiences have motivated me to help other people in my shoes.
I have teamed up with Dean Ouellette to form the East Valley Team - the best darn team in the Valley. Check out our site at http://www.EastValleyTeam.com. I spend way too much time on YouTube - check ou tmy channel at http://www.youtube.com/klavanway
