As we’ve discussed in the past, one indicator of the market “hotness” is the days of inventory. This is the amount of time it would take for every home to sell if no other houses were to be listed. At its lowest point back in April 2021, it would have taken less than 15 days to soak up all the available homes. Since then it has risen steadily up to 26 days in late October. As of today, the days of supply are trending back down to 22 showing that the market is once again heating back up. 

For those speculating price decreases like some of the headlines, the data doesn’t support that we will see that anytime soon in Arizona. As the number of active listings trend downward and the number of buyers trends upward, the basic economics won’t allow prices to fall. In an environment where you have significantly more homes under contract and pending than active and available for purchase, prices will not decrease. 

Buyers:

Your mantra should be “control the controllables.” If you’re still renting, you should be asking yourself why you would put yourself in a position to pay more and more for housing each year. Rents for single family homes have gone up 15% in Phoenix year over year. Regardless of when you enter the housing market, you will at least have a consistent and predictable payment for housing for 15-30 years if you purchase now. You’ll also get the added benefit of building equity which is one of the biggest generators of long term wealth.

I also like to remind people that the first home you purchase doesn’t even have to be somewhere you want to live yourself if you can’t afford to buy in that location. You can start investing in real estate very small and grow over time using renters to pay for your mortgage and build your equity till you can afford something where you would like to live.