A story of inventory in Phoenix
Posted: Sun Jun 17, 2007 11:12 amMy brother came up to visit this weekend. He has been a successful investor in the Arizona real estate market for around 15 years. He also thought that there was a bubble in Phoenix.
When inventory there reached 9000, he told one of his friends that inventory would reach 20000. His friend scoffed and said that was completely unbelievable. Inventory reached 20000.
Then he told his friend that inventory would reach 30000. Again, his friend didn't believe him. Again, housing listings increased to 30000.
Now there are 40000 listings in the Phoenix area. Even my brother was amazed that it reached that level.
We spent a lot of time talking about real estate this weekend. The current 9200 level in KC represents about 3/5 months of sales. His rule of thumb is that prices are flat at 3 months of supply. He said that we are probably just now going to see a flattening of prices. Looking at prices and comparing them to income, he said the same thing is going to happen here that happened in Phoenix over the next few years. Watch for 20k-30k inventory in SFR.
It's coming.
When inventory there reached 9000, he told one of his friends that inventory would reach 20000. His friend scoffed and said that was completely unbelievable. Inventory reached 20000.
Then he told his friend that inventory would reach 30000. Again, his friend didn't believe him. Again, housing listings increased to 30000.
Now there are 40000 listings in the Phoenix area. Even my brother was amazed that it reached that level.
We spent a lot of time talking about real estate this weekend. The current 9200 level in KC represents about 3/5 months of sales. His rule of thumb is that prices are flat at 3 months of supply. He said that we are probably just now going to see a flattening of prices. Looking at prices and comparing them to income, he said the same thing is going to happen here that happened in Phoenix over the next few years. Watch for 20k-30k inventory in SFR.
It's coming.