Hard to believe that here in Phoenix, buyers and their Realtors are feeling like there’s a housing shortage. Home buyers are frustrated, because they are making offer after offer, with no success. Investors are grumping that they can’t buy a foreclosure or a fix-up, when they are competing against each other for the dwindling supply of homes. Multiple offers are common, particularly for homes priced aggressively in the range up to $250,000.
Buyers have started making offers over list price, and now I’m seeing escalation clauses, where a buyer will say something like “will pay $xxx over highest offer, up to $xxx,xxx”. I even saw one this week, with no ceiling.
If you look at what’s going on in the market for cities like Phoenix, Scottsdale, and Chandler, you can see that we do have a dwindling supply of homes. In Phoenix, the number of homes for sale has dropped significantly and is now lower than the latter half of 2006, although inventory has remained stable throughout the summer.
You can see that Scottsdale is experiencing a similar trend, although not to the extent of Phoenix. Inventory levels still remain just above the 2006 figures.
In Chandler, the pattern is a bit different historically, but housing inventory is still decreasing, and rapidly approaching the levels seen in the latter portion of 2005.
The number of Tempe homes for sale has also decreased this year, and is now less than this same time of the year in 2006.
The town of Paradise Valley hasn’t followed same trend you have seen in these other Phoenix-area cities. This town did not reach an all-time high home supply level until earlier this year, where in the other cities, highs were noted in either 2007 or 2008. Home supply is dropping and is just now approaching last year’s levels.
Buyers need to know what they are getting into when they are looking for a home. Besides lining up financing, and starting their on-line home search, it’s important to know that there’s a lot of competition, especially for foreclosures, and even for short sales. Diligence, creativity, flexibility, and patience are needed to find the right house, craft a winning offer, and complete the sale.
Finding the right house has always been a game of give and take. In today’s market, even more so. Buyers may need to expand the areas that they are willing to living in, or decide to sell their current home first, so they can consider purchasing a short sale. Some will decide to expand the price range they are shopping in, and others may decide that certain features like a pool or garage are not imperative. Whatever the choices made, buyer need to understand what today’s real estate market look like. It’s not exactly a housing shortage, but in many Phoenix metro cities, the shelves aren’t fully stocked either.
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Twitter: reoagent1
08.30.09 at 9:31 am
I could not agree with this article more.
I have written multiple offers on homes price UNDER $200,000 and so far have been beat out by all cash offers (my buyer’s are FHA) every time.
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