The Summertime Market
The spring buying season (February-June) is the peak period for home buying and selling in the valley. Summertime brings the heat and, especially in the luxury category, an exodus of sellers and their listings. Consequently, the summer luxury market can tip into a buyer’s market just by virtue of the exodus. The sub-luxury market is also experiencing a smaller drop in supply, but it is currently offset by the equal softening of demand. Overall, the numbers are pretty stable and supply is still in the normal range at the moment. That stability in supply and demand in the sub-luxury market is therefore not exerting pressure on pricing. Current popular media theories as to “a shortage of supply” or conversely “an abundance of supply” are simply ill-founded as the Cromford Report explains:
“Surging inventory would put downward pressure on prices while an inventory shortage results in upward pressure. Looking at median sales price measures, they have had little fluctuation for more than two years, suggesting that neither of these theories is reflected in pricing trends.”
“In short, Greater Phoenix supply counts are not breaking records, they are not surging, and they are not critically low. Statistically, active supply is considered within normal range and stable for now. Meanwhile, buyer contracts have improved 11% over this time last year despite recent mortgage rate increases, indicating that buyer demand could increase significantly should economic certainty improve and mortgage rates fall closer to 6.0%.”
Despite the fact that average sellers are not experiencing rising prices, total sales to date exceeded last year by 2.9% – a positive sign, if somewhat tepid. But as often is the case, the luxury segment of the market is behaving differently than the sub-luxury market. According to the Cromford Report: “The largest improvement is in the luxury market where sales over $1M are up 10% and at a record high. Most impressively, sales over $5M are up 31% over last year and there have been 36 sales over $10M so far, already exceeding last year’s annual record of 32 before the year is halfway through. As for the rest of the sellers, it’s business as usual as buyers are still in the driver’s seat.. Home condition matters, seller incentives matter, and pricing matters. Expect marketing times to increase by approximately 6-10 days over the next 2-3 months.”
If you want specifics about the market in which you want to buy or sell – contact us for a free supply/demand analysis of your area.
Russell & Wendy Shaw
(Mostly Wendy)