Number of Houses for Sale Still Skyrocketing
Up 116% From Last Year
New Arizona law requires real estate wholesalers to disclose to home sellers that they are wholesalers and they may resell (“assign”) the contract they have with the seller to another buyer at a higher price before the sale closes.
That new buyer would pay more for the house than the seller will receive and the wholesaler will pocket the difference. This is sometimes called “flipping contracts.”
I’m gonna bet the disclosures are going to be written in legalese that most sellers wouldn’t understand.
If you get an offer to buy your house and the buyer is “Joe Blow and/or assignee” you may very well be able to sell the house for more money to someone else… but probably not as quickly.
I don’t think allowing flipping contracts is good for home sellers or home buyers. Sellers make less money and buyers pay more money. Why is it allowed? If they want to flip the house, let them buy the house, own the house and then resell it.
Mike Orr at The Cromford Report.
"Buyers are now seeing between 800 and 900 more active listings to choose from every week. If the trend continues at this frenetic rate we could reach market balance as soon as mid-August."
Rents. I’m still not sure why rents went up so much in Arizona.
I assume the fast-growing population was a big factor.
I assume the explosion in the number of short-term rentals is a factor - They increase the supply of lodging by reducing the supply of housing.
Were the eviction moratoriums a factor? Revenge rent increases?
Short-Term Rentals. Arizona is way behind the curve in regulating short-term rentals all thanks to Arizona Governor Doug Ducey.
One Weird Trick to Prevent Future Housing Crises
After LLCs were invented, I think Arizona law had to be changed to allow LLCs to own houses. Can we go back and change the law so only natural-born persons can own houses and condos? Business entities can own apartments, retail, industrial, etc., but not single-family houses and condos. Let’s make home ownership boring again.
This time is different. I think COVID changed the rules of the game for how the U.S. government responds to future crises. If house prices fall very much, I bet the government does another mortgage forbearance. There’s no cost to the government balance sheet so it’s easy to do politically. Another reason why this isn’t 2005.
On the downside, if prices don't correct, we end up like Canada, Australia, and New Zealand with crazy expensive houses and embedded wealth inequality.
Click on the graphs to go to the full-size, interactive version.
Let’s zoom in on New Listings and Solds.
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.
Phoenix Weekly Market Graph (only)