The return to normalcy for the Phoenix real estate market seemed to remove a significant deterrent for those looking to buy a home in the Valley.
Phoenix has recently been classified as a “balanced market,” meaning there is no significant advantage for sellers or buyers in a typical real estate negotiation. However, these improving market conditions have not brought back what many analysts were expecting: more homebuyers.
“The big question is why is (buyer) demand low right now,” said Arizona State University Director of Real Estate Michael Orr on his weekly appearance on That Real Estate Show. “I’d like to know the answer to that. It’s causing me to scratch my head right now, because (buyer) demand was perfectly normal just three months ago.”
Just like three months ago, Phoenix home prices have continued to rise. According to a report released by Orr and the W.P. Carey School of Business at ASU, the median home price in Phoenix rose from $192,000 in August to $199,000 in September. Orr expects these increases to continue over the next few months.
“Everyone’s got to remember that prices are a trailing indicator, so even when the market is balanced, prices will continue to go on rising for probably four, five or six months.”
Orr also contended that these home price increases are far less of a concern for the Phoenix real estate market in the year ahead.
“Demand is the thing that I would like to see improving if the market is going to be healthy next year,” he said. “The issue at the moment is a lack of buyers. It’s a shortage of buyer demand, which is unusual.”
Unusual has been the norm in Phoenix real estate in recent years, and expecting the unexpected seems to be the only projection worth counting on.