As we analyze May’s market stats, we see more and more signs of the Market Shift that we keep seeing pop up in the news headlines. Some highlights from the latest stats:
🟢Inventory has increased by 90% in the last 2 months alone
⚪️Buyer Demand has dropped by 8% in the same timeframe
🟢Year-over-Year price increases remain in the double-digits
⚪️Homes under $500K see the largest drop in demand
🟢Luxury Homes ($1.5 mil+) see the largest increase in homes needing a price reduction before going under contract
All of these stats point to the continuing market shift. Supply is creeping up and demand is dropping (ever so slightly). The change is due more to supply increasing vs the demand dropping though. That is a positive thing! We want demand. We don’t want the market to stall, we just want more homes to choose from. And that’s exactly what we are seeing right now.
One of the biggest indicators we look for are Seller Concessions. And we are starting to see them now! In certain locations and types of homes we are seeing Sellers paying for home warranties and allowable HOA fees. We have builders starting to give buyers incentives on spec homes, such as paying a percentage of the buyer’s closing costs. All of this tells us the market is clawing its way back to an Arizona level of normal.
The two categories with the biggest changes: Homes under $500K and Luxury Homes ($1.5 mil+). This is to be expected as we typically see a cooling of the market on the extreme ends and then it creeps toward the middle categories.
For now, I like to say the Seller Tsunami has slowed to more of a Seller Frenzy.
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