Housing Inventory So Low...Need About 24,000 New Listings To Be At Normal Level

Here are the basics - the ARMLS numbers for April 1, 2021 compared with April 1, 2020 for all areas & types:

Active Listings (excluding UCB & CCBS): 4,088 versus 13,211 last year - down 69.1% - and down 9.0% from 4,491 last month
Active Listings (including UCB & CCBS): 8,699 versus 17,238 last year - down 49.5% - and down 4.3% compared with 9,094 last month
Pending Listings: 7,964 versus 6,125 last year - up 30.0% - but down 0.8% from 8,027 last month
Under Contract Listings (including Pending, CCBS & UCB): 10,152 versus 11,988 last year - up 23.9% - but down 0.4% from 12,630 last month
Monthly Sales: 10,385 versus 8,076 last year - up 28.6% - and up 29.2% from 8,039 last month
Monthly Average Sales Price per Sq. Ft.: $231.61 versus $186.61 last year - up 24.1% - and up 1.7% from $227.68 last month
Monthly Median Sales Price: $358,250 versus $301,000 last year - up 19.0% - and up 2.7% from $349,000 last month

The active listing counts are now so small that it makes a huge difference which day of the week you measure. Over the last week the maximum count (on Saturday) is 16% higher than the minimum (on Wednesday). In some locations there can be twice as many homes listed on Saturday as the following Wednesday. This means that comparisons of April 1 with March 1 can be misleading because it depends on the day of the week they happen to fall on.

What we can tell you for certain is that the active listing count was painfully small last month and this month it is no better. We would need to add about 24,000 active listings to get back to a normal level. Many of the younger agents working in Phoenix have never experienced a normal level of supply.

The monthly sales count for March 2020 was strong but the annual comparison with March 2020 is affected by the COVID-19 measures that started to bite in March last year. Between March and June last year the pending listing counts and under contract counts were dramatically lower than normal, which tends to obscure the fact that these counts in 2021 are also somewhat lower than we would normally expect. This is one of several signs that demand is starting to fall from the heights achieved in 4Q 2020.

Once borrowers start emerging from forbearance, we may see some degree of improvement to the abysmal supply shortage. However, indications from the lending industry suggest that any increase in supply will be tiny compared with the flood of distressed homes that hit the market between 2007 and 2013. We expect to see price rises slowing a little after June 2021, but there are currently no indications that a change in the direction of those prices is likely.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report