Balance Returns to Arizona Housing
May 27, 2014
For the last decade, the local housing market has been driven by extremes. In the early 2000’s fever-pitched demand and readily accessible financing (one could say too readily available to some borrowers) led to an overheated run-up. Then the housing bust, driven by an economic great recession, a flood of distressed properties, a tight squeeze on financing and a shrinking pool of buyers. Then the market bottomed out in 2011 and for the last 2 years we have been in a recovery trend.
What we haven’t seen in all these years is a normal (or balanced) market. Welcome to 2014, because a more normal market is where we are right now. While some parts of the nation are still experiencing a shortage of listings, in Arizona we are currently at a more balanced position. The rate of pricing appreciation this year has slowed and distressed sales are drying up. These are all signs of good health.
Normal is good. The charts below show the balance of supply to demand in Tucson’s housing market, and affordability trends in Phoenix and Tucson. You’ll note that while the overall market is more balanced, different conditions exist at various price points. Monthly payment on a median priced home is up slightly from the market bottom, due to rising prices and interest rates slightly off lows, however with a more stabilized and normal market the rate of increase in costs of purchasing a home should slow to a more normal pace.
As always, your Long Realty agent is the best source of information on your local market and what it means for your situation.
These statistics are based on information obtained from TARMLS and ARMLS on 05/05/2014. Information is believed to be reliable, but not guaranteed.