It has been a hectic season for buyers over the past few months, but they may see a small amount of relief as we head into July. Typically, July and August see a downturn in buyer activity as many residents head out of town for a break. For those who choose to stick it out in July, this brief lull will give them a little more inventory to choose from with fewer competing buyers to push through. Don’t expect to notice a significant difference. It’s comparable to turning the stove burner down from HIGH to MEDIUM-HIGH at this point.
STILL ON HIGH – Most West Side areas, such as Southwest Phoenix, Glendale, Avondale, Laveen, and Tolleson, are still frenzies with more properties under contract than active for sale. This is due to their average price point under $200,000 and the continuing decline of new listings in this range. Buyers in this price range should not rest; they must remain diligent and ready to pounce when the right property comes on the market.
REDUCED TO MEDIUM-HIGH – We’ve seen a slight cool down in the Southeast Valley, most notably in those zip codes encompassed by the Loop 202. Most affected are those areas with an average sales price between $200,000 and $300,000.
Buyer activity has increased this year across all price points. The inventory shortage, however, is most acute under $300,000 which will cause prices to rise.
July marks the beginning of the summer lull in buyer activity. June marked the highest level of monthly closings so far this year; however it also logged in the highest number of listing cancellations in seven months. Cancellations were higher for listings over $300,000, with those over $500,000 reaching their highest monthly measure since the summer of 2009.
As we continue to discuss the chronic inventory shortage under $300,000, it may come as a surprise to find so many listings in that price range closed after six months or longer on the market. This is a common occurrence when the market shifts from a Buyer’s Market to a Seller’s Market. As buyers eat up the available inventory, previously unappealing properties in terms of price or condition become attractive in the absence of choice. When they finally sell in the frenzy, their Days On Market count will push the overall average up.