October Market Update

Well, the tight inventory of homes persists as we consider the October Market Update.

The shortage (maybe shortage is too strong a word); the unexpectedly low supply of active listings may be what is driving the Cromford Index higher.

The seller’s have an advantage. Two of the three listings we had in the last month sold in days at list price or just about list price.

When I pulled out just the CenPho zip codes that dominate the historic areas –85003, 04, 06, 07, 12, 13 & 15– we see the same general condition, just with fewer listings than the whole county, obviously.

The sales price per square foot dropped in the CenPho area by only $2, so it was just outside the Cromford Report’s statistical margin of error. I would not expect that to change much unless we were to see a true increase in inventory.

And, as you know, we are not seeing significant construction on condos and townhomes in CenPho –just lots of apartments.

But, the big news continues to be that shortage of inventory. What is causing it?

Is it because people who want to sell are concerned they can’t find something new reasonably priced?

Is it because ibuyer companies have bought up a huge number of homes and have turned them in to rentals, thus depriving the market, over all, of inventory?

I tend to believe it is the latter. I also tend to believe that the number of AirBnB properties in the valley (nay, the country!) could have a downward affect on prices the next time the over-all economy corrects.

In other words, when the economy inevitably slows, there will be fewer people staying at hotels and AirBnBs. Many owners will sell and that might increase supply in such a way as to further depress prices.