If you have been out shopping for a home recently; you may have experienced multiple offer bidding wars occurring which is becoming commonplace for the “good” homes out there. You got to have patience and be prepared to jump when a home you like comes available because odds are that you are not the only one that will be interested in it.
The below chart is very interesting because it shows the Inventory Levels in the last 10 years for here in the Valley; compliments of The Cromford Report. I’ve had the pleasure of working in Real Estate now nearly 20 years, since 1993. When I started my career, I mainly focused on selling HUD homes which are definitely becoming quite prevalent in our marketplace again. Real Estate traditionally will bring someone a 5-6% gain in value year over year here in the Valley because of the steady flow of Supply and Demand- that was until 2004 when we saw our market go “crazy” and values increase exponentially.
To put this into perspective- our “happy place” for supply and demand typically is about 4-5 months worth of inventory.
Today we have just 27,618 Active properties in our marketplace and 104 days worth of inventory
Last Quarter; May 2011- we had 33,094 Active properties and 132 days inventory
Last Year; August 2010- we had 43,417 Active properties and 172 days inventory
Clearly the trend is downward with our Active properties available to pick from; but the word has not gotten out to the general public yet- therefore we have not seen a jump in prices as of yet.
Our average price per square foot today is just $82.46 and our prices have been relatively stagnant since September 2010. The question is how long will that last? Inevitably, the law of Supply and Demand will have to kick in sooner or later and the prices will definitely start to rise at some point in our near future.
When I reflect on my own career- today’s pricing is very comparable with the nineties and rates under 7% were considered very good back then. Today we are happy when rates are below 5%, which means monthly our homes cost us less today than they probably ever have ever in recent history.
In 2004, I had the first Holiday Season where my business did not slow down at all. The Days of Inventory in November 2004 were just 46. The “peak” of our market was April of 2005 when the supply was at 31 days of inventory VS the worse we have seen being in April 2008 (just 3 yrs later) at 425 days of inventory available. Our advice to folks watching the market and trying to decide when it’s safe to get back in it- is TODAY is the day but you MUST have patience and be prepared for the bidding wars and multiple offers.
It can be frustrating, but it’s worth it because the prices & rates are still so low. If you or someone you know is considering making a purchase and needs help from an experienced and trust worthy Realtor- please let us know. Contact us here to get started OR call us at 480-243-4242 & we will gladly send you a customized list of homes to check out!