New And Total Phoenix Housing Inventory Data and Trends

If you looked over the most recent Phoenix market stats report with July 2011 numbers your probably saw some oddities and arrived at some contradictory conclusions. 

On the one had people are nearly jumping over each other, though in an orderly manner, to get homes under contract yet prices continue to be weak and will probably decline at least a bit over the next 1-2 quarters.  Just take a look at the inventory numbers below. 2011 New inventory is below the 2010 and the trend has diverged. 

Even total inventory is at a long time low. Take out AWC contracts and truly active and available inventory is only about 20,000 units. That's low, yet prices don't rise.

The economy has not improved, there are not more jobs out there, people are still struggling and loans are more difficult to obtain even though there are more of them than last year, thus the only reason it seems like a mad house out there is not because the market has truly turned around: it may have, but because there is no inventory and what is out there is still over 50% distressed properties.

New Inventory

New inventory dropped again in July to 9,140, besting December’s twelve month low of
9,443. New inventory added each month has traveled on a downward trend line since
last August. Declines in new inventory affect the current supply and are recognized as a
healthy sign.

Total Inventory

Total inventory in July continued its decline started in November. July’s figure (27,663) is
a 5.3% decline from June and a 35.5% drop from July 2010. The Valley’s large inventory
perpetuates the market’s imbalance in many market niches, and the steady decline in total inventory is a vital component in righting the supply and demand balance.

→ Source Quoted + Graphs = ARMLS