Phoenix on the edge of a balanced real estate market
Oct 19, 2013, 3:30 PM | Updated: Oct 21, 2013, 9:17 am
‘Balance’ may be one word that fell out of the Valley’s vernacular, but we have the local buyer shortage to thank for putting it back.
A local real estate expert said the lack of buyers is a good thing, because it will help keep the Phoenix area on track to hit a balanced real estate market.
You think I’m joking right?
Let me explain.
First off, where did all the buyers go? It was just a couple of months ago that we were hearing about rising prices, buyers competing for properties and stories of multiple offers. It felt like we were back in 2006, didn’t it? There are a few reasons why buyers have crawled back into the woodwork.
Mike Orr, director of real estate at ASU, told That Real Estate Show on Saturday that in many areas in the Valley, prices are up by 50 percent.
“That’s (the price increase) going to put buyers off to a certain extent. Interest rates are bad news, on top of that, and then there’s the uncertainty,” Orr explained. “There are lots of headlines and scary stories. We’ve got people talking about it being a bubble, which puts people off. They may have been caught the first time, but they certainly don’t want to make the same mistake twice.”
Is there an upside?
Fortunately, yes. The lack of buyers helps push the real estate market to a “balanced” market.
Orr says that definitely the lack of motivation to buy at the moment is causing things to get back to normal.
“We still have areas which have less supply than others, but overall, the market is heading quickly back to market, if we stay on the current track,” Orr said. “By mid-November, we should be back to a normal overall situation.”
Weren’t we just seeing multiple offers and homes flying of the shelves in June and July?
In short? Yes.
“I think everyone’s surprised at how quickly it happened. It seemed to stay frenetic for so much that people thought maybe we weren’t going to go back to balanced,” said Orr. “In July, we were still very strongly short of homes and just three months later, we’re almost back to balanced. That’s quite a fast change.”
So, how long will it last?
“Phoenix is a very dynamic market and fast market, so who knows?” Orr said. “We may not stay balanced for long.”
Listen for more Phoenix real estate news with realtors Diane Brennan and Rod Lakin on That Real Estate Show Saturdays at 3 p.m. on News/Talk 92.3 KTAR.
