By Bill McBride | Calculated Risk
This is a key housing market to follow since Phoenix saw a large bubble and bust, followed by strong investor buying.
The Arizona Regional Multiple Listing Service (ARMLS) reports
1) Overall sales in April were up 4.5% year-over-year.
2) Cash Sales (frequently investors) were down to 22.5% of total sales.
3) Active inventory is now down 11.0% year-over-year.
More inventory (a theme in most of 2014) – and less investor buying – suggested price increases would slow sharply in 2014. And prices increases did slow in 2014, only increasing 2.4% according to Case-Shiller.
In 2015, with falling inventory, prices increased a little faster. Prices were up 6.3% in 2015 according to Case-Shiller.
With flat inventory in 2016, prices were up 4.8%.
This is the sixth consecutive month with a YoY decrease in inventory following eight months with YoY increases.
“Both resale and new home prices are expected to appreciate rapidly this year as supply of resale homes is well below “equilibrium.” So few resale homes exist in most Metro Phoenix Area submarkets that more buyers are considering new homes today. Belfiore Real Estate Consulting analysts project new home prices will have risen by 6% to 8% this year as a result of increased demand and rising construction costs, and by another 5% to 7% next year.”
~Jim Belfiore
