Foreclosed properties are almost down to long-term, “normal” levels. There is no shadow inventory. But you’ve heard me tell you why a hundred times by now. In February, there were fewer than 1,000 recorded residential trustee deeds in Maricopa County for the first time since September 2007.

But if you want to understand the most important driver of cost, you need to look at inventory, which we do regularly here. See the chart, above. See how the average days on market for all homes has dropped from over 160 in early 2011 to about 60 today. This number is lower for cheaper properties and lower for homes in CenPho, in many cases. 

So, what happens when inventory goes down? Price goes up! 

Expect more of that, as home builders are still not building as quickly as they once did. Most importantly, they are not building in the CenPho area. Further, people who might have been thinking of selling are hearing about price increases and they may be holding off, hoping for even higher prices before they sell. We really need those houses on the market to keep prices from rising too quickly. (Price increases are good, but not when they create the conditions for another bubble!)

Further, further, sellers are listing their houses at inflated prices just to see who will bite –people are biting and appraisers are supporting those prices.

Further, further, further, interest rates continue to stay low. So there are a ton buyers for very few houses. What do you do? If you are a buyer, don’t hesitate. Get out there. If you are a seller, I would not wait too long either. I think we have the makings of a mini-bubble. There is an equal chance that you could wait to list your home only to find that mini-bubble burst and prices are lower than they are today.

If you are thinking about listing you home (even for short sale), please give me a call and let’s meet. If you are thinking of buying, let’s grab a cup of coffee and talk about your plans. We can build a strategy that gets you the home that you are looking for.

Call me at 602-456-9388.