Are Potential Sellers Riding the Wave of Appreciation and Waiting to Sell?
Do Large Price Increases Reduce Supply Instead of Increase It?
Demand is down a bit but supply is down even more so, overall, the Phoenix real estate market is even tighter!
The appreciation rate was 19% over the last 12 months but with the supply so tight right now, Phoenix house prices will likely appreciate even faster through the high season – through June.
On a cost per square foot basis, Phoenix house sold prices are up almost 16% in half a year, according to The Cromford Report.
A likely scenario is that when house prices finally stop rising (2022?), that it’ll be hard to sell houses for a long time, and house prices will be flat or falling for many years. Sort of like the early 1990s but without falling interest rates to help support house prices.
Click on the graph to open the full-size, interactive version.
Houses Just Listed For Sale
A lot fewer houses are hitting the market even though house prices are up 19% from last year.
The faster prices increase the less motivated some potential sellers are to sell. Why not ride the wave of appreciation and sell later? Rapidly increasing house prices REDUCE supply.
Standard economics doesn’t work for housing because supply reacts so incredibly slowly to price changes.
Houses For Sale
Down 63% from last year and seems to be headed lower!
Houses Under Contract
At these prices, demand might be slowing a bit.
This information can vary a lot in different parts of metro Phoenix. Your real estate agent can find the data for your specific city or zip code at The Cromford Report.