I was ridiculed from coast to coast for saying the local real estate market was ‘abuzz’, but similar stories are slipping out. Yesterday’s post about the downtown-SD condo market showed inventory has dropped from 600+ units last year to just 247 condos for sale currently, and sales are up. Apparently the drop in prices, and mortgage rates around 4%, are causing more properties to be sold!
Here’s another, this one about the Phoenix market.
(P.S. I got busted by the Wall Street Journal yesterday, and told them that I would abide with their policy to only include a snippet, and direct you to their website for the full article. Hopefully you are a subscriber!)
From the wsj.com:
PHOENIX—The Phoenix housing market is defying conventional economic theory.
Inventories of homes for sale are low, falling 41% to 21,304 in October, compared to 35,732 at the same time a year ago for Greater Phoenix, according to the Cromford Report, a market research firm in Mesa, Ariz.
The number of home sales is rising—to 6,428 in October from 5,443 in same month a year ago, according to the Cromford Report. The city’s unemployment rate is inching down and is below the national average.
The laws of supply and demand suggest housing prices should be rising, or at least stop falling. But they continue to decline, due to a flood of bargain-hunting investors who still dominate the market, as well as conservative bank appraisals. As a result, economic recovery in what was once one of the country’s most dynamic cities is being held back.
The monthly median price for a previously owned, single-family home in Greater Phoenix sank 5% to $120,000 in October from $127,500 a year earlier. The national median was $165,400 in September, the latest month reported by the National Association of Realtors.
Over the same time, as prices weakened, unit sales rose 18%, according to the Cromford Report.
Read the full article here:
(Everyone mis-reads the drop in median sales price as a sign that prices are dropping, but what it really means is that more properties on the lower end are selling. When inventories are dropping, and sales are rising, you have a healthier market.)
Is it just a seasonal drop-off? Not in San Diego. Compare the difference above between today’s inventory with those from 12 and 24 months ago.