This morning, I was catching up on some reading and doing a little bit of research trying to keep my brain wrapped around the fast moving pace of our real estate market. While most people are still asleep, I am up at 4:00am reading about current market trends! So I thought I would use this blog to share with you my findings. So has the housing market improved?

I read an article provided by which was a report from ASU real estate studies professor, Jay Butler. His report shows the percentage of existing home sales that went to foreclosure dropped to 36% in April. This was a slight improvement from the 38% in March and a large improvement from the 43% reported in January and February.

These improvements could be from a variety of factors, such as more loan modifications and short sales being approved and/or the banks holding back on processing the actual trustee sales. There are still plenty of people out there who are underwater and could or will face foreclosure. But, in the short term, these changes in the percentages could shift the value of the housing market – thus stabilizing pricing and curbing what has seemed to be an out-of-control-downward-tailspin for the past 4 years.

I pulled the active inventory in the MLS (Arizona Multiple Listing Service) for Maricopa County and found some rather shocking data:

1.) The available inventory currently – homes for sale – is only 25,441.
2.) There is a code we use in the MLS which is “for sale with a contingency”, which simply means there is an offer on the home, but the listing agent is continuing to solicit back up offers. So technically or not, depending on which side of the fence you view the AWC listings, this brings our MLS inventory to 33,418 – or a potential of 7,977 additional homes that we could add into the available inventory.
3.) Today, there are 14,229 homes currently are sale pending. Those homes have what we Realtors would consider a solid offer and will most likely close as planned.

Now, if we take the first number of available homes (25,441) compared to those that are truly sale pending (14,229), that means, right now, we only have 1.79 months of available inventory for sale – WOW! Compare these numbers to this time last year, when we were looking at least a 12 month supply of inventory and at one point at the bottom of the market, we had over a 24 months of supply of homes for sale. Personally, I can share with you my own active listing inventory is the lowest it’s been since I started working the REO market.

So what does this mean to you? Well the rule of supply and demand teaches us that when supply is low, demand is high and vice versa - or some people would say "buy low and sell high". With only 25,441 homes for sale, this will evitably increase activity, creating multiple offer scenarios and thus driving prices back up. How far up, well that will remain to be seen – but bottom line is this – if you have been waiting to buy at the bottom of the market NOW is it.

One last thing before I wrap up this blog – the median sales price of a home in Maricopa County is hovering around $125,000 according to Jay Butler. I personally, have my own opinion and think this number may be a little high, especially if we are looking at specific areas of the Metro city. However, be that as it may, the point I want to make is really about the interest rates. Right now, you can lock in an FHA or VA loan for approximately 4.375% and if you wanted to do an adjustable 5/1 ARM, you could start with a rate as low as 3.750%. Conventional loans are holding steady at around 4.625%. On a purchase of $125,000, using the purchase price as the loan amount on an FHA loan, the principle and interest payment is $625.00 a month. Think about how this dollar amount could change if you are buying a $50,000 or a $75,000 or a $100,000 house? You can’t rent for this cheap! Call me today to get started – seriously, if you wait much longer, you are going to miss out on the best time in the history of our housing market to buy.