For over 6 years the Arizona housing market has been in a downturn. Falling prices, lower buyer demand, rising inventories and distressed properties have plagued the market – and in turn the economy.
Are we finally coming out of the downturn and starting the upturn? There is evidence to support that we are. Sure, there are still headwinds of unemployment, foreclosures, depressed prices, and strict lending guidelines, however it finally seems that home buyers are taking advantage of this window of opportunity with record low mortgage rates, low prices and increased affordability. The slow yet increasing stabilization of the economy is also a catalyst to housing health.
Let’s look a little closer at the numbers.
More Properties are Selling
For the month of January 2012, the number of properties that went under contract in Tucson was 1,652 – the highest monthly rate since April 2010 (which was the last month before the federal home buyer tax credit ended).
Fewer Properties for Sale
While demand has picked up considerably, supply of homes listed for sale has declined. At the end of January 2012 in Tucson there less than 5,000 homes on the market.
With supply decreasing and demand increasing, basic economics tells us that pricing should stabilize and then eventually rise. And in Phoenix, where the upturn may have actually started in 2011, it has.
Only time will tell, however signals are pointing to 2012 beginning an upturn in the Arizona housing market. Will there still be foreclosures to contend with? Yes. However the market has shown an ability to absorb those foreclosures at a steady pace and the rate of new foreclosure filings has been on a decline. Will it be a crazy, fast upturn? Probably not, and we hope not, but we may expect to see growing demand, more competition for a shrinking supply of listings and price stabilization. We’ll be tracking these trends closely at Long Realty and sharing our findings.
Data obtained from TARMLS and ARMLS using Brokermetrics software on 2/2/12