The number of homes sold, according to statistics from the Arizona Regional Multiple Listing Service, has been declining since August.
August 2005: 10,013
September 2005: 9,180
October 2005: 8,003
November 2005: 7,315
December 2005: 6,542
January 2006 (as of Jan. 15th): 2,298
Expectedly, when the number of sold homes decreases, the number of homes available on the market increases. As of this writing, there are currently 27,154 listings in the "active" status on MLS, a sharp increase from this time in 2005.
What does this mean? It means that sellers have ceded control of the housing market to buyers, and buyers are becoming more patient and methodical in their searches. This is great for buyers, and bad news for sellers hoping to cash in on last year's boom. Does this spell doom and gloom? In my opinion, no. This is simply that market getting back to "normal."
It is unlikely that we will have any kind of bubble burst here for a few reasons. The population of Arizona continues to grow, as does the economy. Our housing market was considered under-priced for many years, and caught up quite a bit last year. Owning a property is not like owning a stock. Stocks can go to zero in a few hours based on panic selling. Properties are illiquid and tough to move in a hurry, thus commanding more emotional stability. Further, though property prices can decrease in value, they are unlikely to ever go to zero like Enron or other burst stock bubbles. Every property is inherently worth something, since there is a finite amount of it.
If you are a buyer, enjoy this time since economic conditions indicate that people still are moving here in droves, and the inventory will fluctuate. If you are a seller, it is critical to make your home as sale-able as possible, price it correctly, and be patient.
-David B. Roney
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