{"id":831,"date":"2018-09-07T23:46:19","date_gmt":"2018-09-07T23:46:19","guid":{"rendered":"https:\/\/nohasslelistingblog.com\/?p=831"},"modified":"2018-09-07T23:46:19","modified_gmt":"2018-09-07T23:46:19","slug":"is-the-housing-market-losing-its-steam","status":"publish","type":"post","link":"https:\/\/nohasslelistingblog.com\/?p=831","title":{"rendered":"Is the Housing Market Losing its Steam?"},"content":{"rendered":"

Recently national housing statistics have made headlines regarding the diminishing demand of homebuyers.\u00a0 This is understandably unsettling to homeowners in the valley who recall all too \"\"well the housing crises where supply and demand went topsy turvey.\u00a0 As interesting as it may be to listen to national housing statistics, they are generally antidotal.\u00a0 Even in the midst of the housing crisis of the \u201cGreat Recession\u201d there were markets that saw little downturn \u2013 proving that real estate markets are local. Is the valley in the midst of dwindling demand?\u00a0 The short answer \u2013 a slight abating of demand is possibly underway.\u00a0 Is it so great to affect pricing or cause any significant impact to our market?\u00a0 No.\u00a0 This is due to the largely chronic lack of supply.\u00a0 Perhaps some numbers can better put this in perspective.<\/p>\n

Demand <\/strong>The first thing to understand is the seasonality component of real estate \u2013 i.e. different times of the year perform differently.\u00a0 Headlines can rather easily claim \u201cbuyer demand is down\u201d simply by comparing April\u2019s numbers to September\u2019s numbers. Buyer activity reaches its peak in April and then increasingly slows through the rest of the year.\u00a0 To have meaningful comparisons year over year numbers should be examined.\u00a0 One key measurement of buyer demand is contracts.\u00a0 We can then see for instance, that contracts have dropped 26% from the April peak this year, compared to a 20% drop in 2017 over the same time period.\u00a0 That can lead us to the conclusion that a slight weakening in demand may be underway.\u00a0 Slight being the keynote concept.<\/p>\n

Supply<\/strong> Like demand, supply also follows a seasonal pattern.\u00a0 Listings typically hit their low point in August and then rise until Thanksgiving (with a large exodus of cancelling listings at the end of the year).\u00a0 In 2018 we hit the low point a bit early – July – and supply has been drifting upwards since.\u00a0 But before we hit the alarm button, the overall numbers put this in perspective.\u00a0 Here is an interesting analysis made in June of this year by the Cromford Report :<\/p>\n

The total number of active listings \u2026 is 19,736 today for all areas & types across the ARMLS database. This is just slightly above June 15, 2011 when we saw 19,696. We have to go all the way back to October 2005 to find another 15th date (19,715) with lower active listings.<\/em><\/p>\n

Active listing counts have been on a declining trend since April 2014 when we hit a short term peak of 30, 506. We would consider somewhere between 30,000 and 35,000 to be sufficient for a balanced market. The all-time record high for a 15th date is 58,195 in November 2007.<\/em><\/p>\n

Between 30,000-35,000 active listings would be considered a balanced market.\u00a0 As of this writing the active listing count is at 19,860 \u2013 not even close to a balanced market (and remember, that even balanced markets do not cause price drops \u2013 they just stop or slow appreciation).<\/p>\n

Of course, different areas and types of properties are reacting differently on supply levels.\u00a0 As Cromford comments:<\/p>\n

There are some areas that have seen a dramatic rise, often from abnormally low levels. Florence is probably the best example. At the end of June we had just 100 active listings without a contract, but since then the count has shot up 38%. The trend does not affect mobile homes, but single-family listings have jumped from 71 to 111, an increase of 56% in just 8 weeks. A similar but smaller event has occurred in Casa Grande and Coolidge. The only areas outside of Pinal County with a jump like this (albeit more moderate) are Litchfield Park and Surprise.<\/em><\/p>\n

The Answer<\/strong> -So what is the take away of all this?\u00a0 If demand is showing early signs of lessening, and some areas are seeing increasing supply \u2013 when is the tipping point?\u00a0 The answer is contained in the supply numbers.\u00a0 Again, to quote\u00a0 Cromford :<\/p>\n

\u00a0Fluctuations in demand are unlikely to have much impact on the market until we see an increasing trend in listing counts. This was the first sign of a slowdown in April 2005 and will be the first sign of a slowdown if and when we get one in the future. It came suddenly and unexpectedly in April 2005 and it may do the same at any time. However, nobody paid any attention in 2005 and I am assuming we are all older and wiser now. Any unusual activity in the listing counts will show up in the daily Tableau charts which we create and study each and every day. <\/em><\/p>\n

We too watch the listing counts.\u00a0 When we see shifts, you will hear it from us.\u00a0 Until then, do not believe the headlines.\u00a0 As always, we are here to help you with any questions or concerns specific to your home or neighborhood.<\/p>\n

Russell & Wendy Shaw<\/p>\n

(Mostly Wendy)<\/p>\n","protected":false},"excerpt":{"rendered":"

Recently national housing statistics have made headlines regarding the diminishing demand of homebuyers.\u00a0 This is understandably unsettling to homeowners in the valley who recall all too well the housing crises where supply and demand went topsy turvey.\u00a0 As interesting as it may be to listen to national housing statistics, they are generally antidotal.\u00a0 Even in […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[],"class_list":["post-831","post","type-post","status-publish","format-standard","hentry","category-home-values","category-market-stats"],"_links":{"self":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/831","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=831"}],"version-history":[{"count":2,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/831\/revisions"}],"predecessor-version":[{"id":834,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/831\/revisions\/834"}],"wp:attachment":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=831"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=831"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=831"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}