An Arizona Republic article July 18 seemed almost giddy in anticipation of soon getting to a “balanced” market.
The headline: Good News, homebuyers: Housing market shift is coming
Of course, the metro-phoenix housing market is nowhere near “balanced” and the stats are more “hints” than “trends”, but there’s hope. A softening of the local housing market was way, way overdue … and sorely needed.
The number of listings for sale, the number of days on-market, the number of price reductions, and the number of transactions in escrow have all shown slight trends starting in February away from recent market extremes.
The chart below illustrating the Sold-to-List-Price ratio seems to provide an accurate perspective. Yes, that ratio is coming down … but buyers are still paying more than the list price … very abnormal.
A healthy number for this stat is about 98%. At that level and with relatively few list price reductions being taken, the market will be back to “normal” and “balanced” with all parties having realistic expectations.
If we smoothly get to that condition over the next 12 to 18 months, all will be good.
Unfortunately, both that condition and the “smoothly” part seem unlikely.