Supply, or rather the lack of it, is the big issue in the Greater Phoenix market below $1 million. It was already low 12 months ago, but in some areas it has dropped dramatically since then. Here is a table comparing the days of inventory under $1 million (excluding UCB and CCBS listings) in December 2017 with December 2016:
I would say anything below 50 is unusually low and below 40 is extremely low. Chandler and Gilbert are struggling with a supply crisis. Tempe and Mesa are not far behind them. Transaction volumes are dropping due to a lack of homes to buy.
For the Southeast Valley, we are no longer in territory where the market is guaranteed to be well-behaved. Unless we see a major increase in supply, prices may have to rise rapidly to get the imbalance between supply and demand back to within normal limits.
For the Northwest Valley, things are approaching the extremes of the Southeast but are not there yet.
For the Northeast and Southwest Valley, times are good for sellers under $1 million, but have not reached the unusual levels of supply shortage that we are seeing elsewhere.
Phoenix has dropped from 64 to 57 days over the past year and may very well drop below 50 during 2018.
For buyers who cannot stand the pressure, outer locations like Wickenburg, Rio Verde, Carefree, Eloy, New River, Fountain Hills and Wittmann offer the best chance of having your offer taken seriously.
2018 is likely to be a very interesting year to watch the market. Supply cannot keep dropping without limit.