2014 Phoenix Metro Real Estate Market Forecast
2014 is not starting off with a bang. At least not yet. The 4th quarter of 2013 was one of the lowest for pending sales in many, many years (2008 to be exact). This has contributed to a dramatic shift from what was a red hot seller’s market into a balanced market and even in many areas of the valley a buyer’s market. January numbers for 2014 were about 4,500 homes sales in Maricopa County and 4,700 when we include Pinal County. This is not to say that certain sub-markets didn’t do well because some did. But inventory is creeping up and this is a leading indicator of lower prices to come so not to be the bearer of bad news but if you are thinking about selling you better do it soon. The days on market is well over 100-120 days compared to about 70 days last year.
Most of the prognosticators in the Valley are cautiously hoping for a flat market but predict a dip; nothing like in 2007 but still a slowdown. The more optimistic ones are saying this market in Phoenix will be a mirror image of 2013. There are a few that affect the prices of housing. Supply and demand, consumer confidence, and the national economy. There are many factors that contribute to which direction the market or a market segment is heading. We currently have a supply of homes of 4 months but this is increasing. The buzz word for 2014 will be “Buyers Market”. I believe some of the contributing factors to this are the foreclosures in Nevada. The banks are finally foreclosing on their inventory and this has attacked a lot of investment money. Secondly it is getting more difficult to obtain financing due to the Dodd Frank bill (both members of congress conveniently retired last year). A few saving graces are that we have all gotten past the government shut down and National Healthcare is hear; so the fearful anticipated beast has arrived and the public is getting used to it. Also most will tell you the stock market is on a bubble and this might attract more funds into real estate; or it can wipe-out many investors and take more investors out of all markets? Below is a chart of inventory base on price range and you can also view all of the important factors that affect real estate on my market update charts.