Where Are All the Houses?

On Feb. 1, the Arizona Multiple Listing Service (ARMLS) had the fewest number of active listings for any Feb. 1 in ARMLS history. Today, we are easily eight times below the listing inventory needed for a balanced market. We see a Valley filled with houses, so why aren’t more homes on the market? Let’s break it down.

1. Baby Boomers (1946-1964) own about 42 percent of all homes in the United States and they are staying active longer, working longer, and, consequently, staying in their homes longer. Baby Boomers are not downsizing as quickly as expected and their homes are not entering into the cycle of inventory.
2. Low rates drove refinances and last year many homeowners cashed out equity from their homes for remodels and other investments.
3. Low rates and rising prices also caused more homeowners to become stuck. Homeowners found themselves able to afford the payment they had, but not able to qualify for their own home at its new value or buy an equally valued property at a higher interest rate.
4. The booming vacation rental business has turned homes into businesses and consequently, taken many homes out of the general housing inventory. A recent Phoenix New Times article estimated that “more than 5,000 properties out of Scottsdale’s 90,000 households (nearly 6 percent), are now listed as vacation rentals for some part of the year.”
5. Institutional buyers are scooping up single family homes at a record pace and turning them into traditional rentals. In the past year, it is estimated that 10 percent of all properties purchased in Maricopa County between $250,000 and $500,000 were purchased by institutional investors. These large investors hold roughly 30,000 properties in Maricopa County.
6. New home sales were down 15.7 percent in January year-over-year, which evidences the supply chain and labor issues that builders are facing today. Until builders can get homes completed, people who purchased those homes (some as long as a year ago) cannot put their existing homes on the market. Furthermore, until builders can increase the speed by which they build homes, our inventory will remain low.

But despite all of this, we are out looking at inventory and finding properties for our buyers. Today’s market requires a bit of sleuthing and a lot of hustle.

There are many nuances and lots of new ways of approaching a purchase. If you are ready to buy, get real about your plan and give us a call for a complimentary buyer consultation. We are here to help you navigate the process. John and Natascha Karadsheh are co-owners of KOR Properties, a boutique real estate brokerage serving the Valley of the Sun, and the creators and founding sponsors of Mesa Food Truck Fridays.

John has been a Multi-Million Dollar producing agent for over 20 years and is an Accredited Buyers Representative (ABR) and Certified Residential Specialist (CRS), a member of the Arizona Regional MLS Rules & Policies Committee & Appeals Committee, and the West and Southeast Realtors of the Valley Professional Standards Committee.

Natascha is an Associate Broker, a Multi-Million Dollar Producer, Founder of Mesa Food Truck Fridays, and Member, and Past-Chair of the City of Mesa Economic Development Advisory Board and serves on the Board of Directors of the Greater Phoenix Economic Council. You can reach John at (602) 615-0843 and Natascha at (602) 909-4995, or visit their website: KORProperties.com.