Home inventory down and prices upPosted: Updated:
PHOENIX -- Despite recent troubles in our housing market, Valley real estate agents say the demand for homes is high and the declining inventory is driving prices up, shocking those looking to buy.
“It was a long tedious search,” said Jeff LaPapa, who recently moved from Chicago to Phoenix. “A couple places we were this close to buying then we’d get shot down through the bidding wars, so finally we said if we’re going to do this we have to do this.”
LaPapa said they placed bids on a couple dozen homes before finally landing one in Cave Creek which required spending about $30,000 more, and will require about $50,000 be invested.
“We're ripping out all the tile in this whole house and painting,” says LaPapa. “We’re making other upgrades too.”
Those are the kind of compromises Tiffany Young with RE/MAX Fine Realty said more and more buyers have to make in this sellers market.
“The number that was hot last year were those homes under $100,000, that edged up the under 200 six months ago and now we’re seeing bidding wars here in the 3-400 range which has even edged up to the 500 range,” said Young.
Experts say a balanced market has about a s month housing supply. But according to the Arizona Regional Multiple Listing Service, the state’s housing market falls far below that.
“In the $250,000 to $500,000 price range we have a three month supply of inventory and if you look below 100 you’re looking at a 1.6 month supply of inventory,” said Chris Heagerty with ARMLS.
Heagerty said the low supply is pushing buyers into a higher price range.
“We saw in the $250,000 to $500,000 price range a bump of close to 50 percent in the number of homes sold from quarter one to quarter two,” Heagerty remarked.
That’s good news for sellers. But Realtor Tiffany Young suggests buyers be patient and prepared too.
“Put in multiple offers, make sure you're pre-qualified, and sacrifice a little along the way," Young advised.
Just like before the boom, the traditional buyer is having to compete with the cash investor, which experts say is not only driving sales but helping home values bounce back.
“There's a lot of demand pressure coming from investors right now and that will drive prices up. Yeah they helped us get into it but right now helping us climb out of it,” said Heagerty.
According to ARMLS, the median and average home price has already climbed up some 30 percent since we hit rock bottom, and while we still have a long way to go, home values are at least heading in the right direction.