Mike Orr is continually monitoring the Phoenix real estate market, looking for changes. Earlier this week, he posted the following on his web site:
This record is caused by an abnormally high number of pending listings (13,814) coupled with a very high monthly sales rate (9,630 today, or 9,249 as a rolling 7-day average). It looks likely that we shall approach or even exceed 10,000 sales through ARMLS in May 2009.
In addition, there are a record number of active listings with contingent offers (4,549), mostly associated with short sales. Offers for short sales are growing rapidly and closed short-sales exceeded 900 per month for the first time on May 21.
Most commentators seem to be focused on the fact that supply is still higher than normal (which it is, although falling very fast). However the extraordinary demand part of the equation is being largely overlooked. The demand, fueled by very low prices, low interest rates and government incentives, appears likely to grow further over the coming months.
Sales seem to be taking longer to close in recent months, breaking 10,000 sales this month may not happen, but homes are selling and inventory is definitely decreasing.
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