Big Jump in Months of Supply During Last 3 Weeks – Temporary Fluke or New Trend?
Months of Supply of Single-Family Houses for Sale in Phoenix MLS
That’s quite a break in trend 3 weeks ago.
Rates = Up
I assume it was related to 30-year fixed mortgage rates getting close to 8%.
Price Momentum = Flat
In addition, Phoenix house prices have lost most of their upward momentum. The median single-family sold price is about the same as 20 months ago.
Little or no upward price momentum makes house prices more sensitive to bad news.
This sharp increase in Months of Supply could very well be a short-term fluke but it could also be a sign of capitulation and a change in market psychology.
Months of Supply ≠ Months of Supply
Also remember, 3 Months Supply today is a lot more than 3 Months Supply used to be before electronic signatures and all the information online sped up the house-buying process.
Discussion here.
“Can we back out of a home purchase because of a short-term rental next door?”
Chris Combs on azcentral.com.
His short answer was, “First, you are probably entitled, if acting in good faith, to get your $20,000 earnest money back because of the short-term rental home next door.”
The buyer had canceled the contract during the 10-day Inspection Period after learning there was a short-term rental house next door.
It looks like short-term rentals nearby may lower the value of your home to some potential live-in buyers.
Phoenix = #1 Market for Multifamily Deliveries in the First Half of 2023
Will this put some downward pressure on Phoenix rents?
Can we trust mortgage rate forecasts?
"For the second year in a row, mortgage rate forecasters at large have missed—big time—raising the question: can we trust mortgage rate predictions at all right now?"
Click on the graphs to go to the full-size, interactive versions.
Notice how very small changes in New Listings and Solds eventually cause HUGE changes in the number of houses For Sale and house Prices (see graph above).
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.
The option to park your underused property in the Short Term Rental Market delayed the inevitable decline in values. Call it the Super Bowl Effect or not. Whatever was going on in STR's ended. Supply started to bubble back up.
At the same time, demand fell off. The massive surge in Phoenix poulation was driven in part by the desire to escape COVID restrictions in bordering states. Between that and remote work trends, so many people from CA and WA came here in 2021 that housing prices blew up. San Francisco/San Jose are calling people back to work now that they can. So many layoffs in that market that employers have regained the edge in negotiations.
We will discover by the end of 2024 that the immense surge in Phoenix housing demand was a Summer Romance. We're not that cool. It's hot as hell. They're just not that in to us.
And compared to the coastal areas of California and Washington versus the desert, where would you live if you had the chance?
Cheap tax rates and zero COVID restrictions don't cover up the real problems. We have shitty schools. We seem to like having shitty schools. We have absurdly crazy elected officials. We seem to like having those crazy people govern our State.
Would you move here today? It's not a question of whether you would stay here today after noving here during COVID. Would you move here today?
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