I put this video together to discuss the Metro Phoenix and Scottsdale real estate market. Specifically Supply Vs Demand. I discuss how with about 1.2 million homes in the valley and the fact a normal market has about 3.5% of its homes for sale, we should have 42,000 homes for sale. We don’t, we have a little over 30,000.
Also, a normal market transitions from a buyer’s market to a seller’s market at the point where the absorption rate goes below 6 months, or less than 6 months supply of homes. And a market goes from a seller’s market to a buyer’s market when the supply of homes goes over 6 months supply.
Currently we have a 4.7 month supply of homes on the market in metro Phoenix based on August home closings and current inventory levels. If you look at the fact we have closed escrow on 52,956 single family homes through August for 2010. Then divide that by 8 and get 6,619. That is the average amount of home closings based on the 8 months of this year. Take that number and divide it by the current inventory of 30,085, then we have a 4.5 month supply of homes on the market. It would even be better if we did a 6 month trailing average, as January and February are very slow months.
I hope you enjoy the video and get value out of it.
Just my opinion…JeffRCameron
480-652-2004