It’s spring in Phoenix- that time of year when we celebrate an "improvement" in the housing market, whether the market is showing real improvement or not. According to Catherine Reagor in the Arizona Republic yesterday: [Hat tip CC!]
Existing-home sales climbed unexpectedly in February, as home buyers took advantage of low interest rates, falling home prices and foreclosure bargains.
The uptick in resales ended multiple-month losing streaks both nationally and in metro Phoenix and is prompting speculation that the housing market is close to hitting bottom.
If you want to see how close a market is to the "bottom" check out supply vs. demand. Several months [not merely a single data point] of lowering supply and rising demand would be the best possible indicator of a market that is improving. We need to be careful when evaluating a fall in inventory in the winter months, as homes are often taken off the market during the holidays, only to reappear in the spring. Cancelled and expired listings are likely to reappear, and therefore do not represent a diminished supply. Here’s what supply vs. demand looks like in Phoenix these days. [This is for single family and condo sales per ARMLS]
There is currently over 16 months of inventory on the market at the current rate of sales. With over 16 homes for sale per buyer, it is going to only be the aggressive seller that makes the sale–putting downward pressure on prices. It is highly unlikely, then, that prices are anywhere near the "bottom"
Reagor continues:
