A faint glimmer of good news for buyers as the supply of homes has finally stopped declining and actually rose slightly in the last week.  While active listings are still 16% lower than they were at this time last year, they are 1% higher than 4 weeks ago.  This rise can be attributed to a 10% increase in new listings from July to August.  This is not uncommon, as July is typically a low in the year for new listings.  However, this August was 3% below last August in comparison and the lowest August since 2016.  

One price range where inventory is still declining are homes listed in the $200K-$250K range.  Inventory in this price range has plummeted 51% since February.  The Southeast valley of Maricopa County has seen the largest decline of 73% in this price range for single family homes.

Employment growth in metro Phoenix was robust, gaining 58,500 jobs in the 12 months ended March 31, showing a gain of 3.1%, nearly double the national rate.  Improvement was widespread, with all sectors showing net gains.  Construction led the way with the addition of 14,000 positions (badly needed) with the sustained expansion of real estate development.  Education and health services followed closely adding 13,900 jobs, bolstered by both Arizona State University and the booming bioscience field.  Professional and business services also added 11,600 jobs, as the metro Phoenix area is competing with Texas in corporate relocation and expansions.

The Valley's housing market is still strong with prices setting new records and the number of sales continuing to soar.

Valley Real Estate experts do not see signs of a major correction.

According to Tina Tamboer, senior housing analyst with the Cromford Report, a potential plummet in the area's home prices "is not happening".

Metro Phoenix median home price hit a new record of $278,000 in May and likely climbed to $280,000 in June.

Maricopa home sales hit 10,341 in May, the highest monthly tally since the boom of 2005.

Mortgage interest rates are down from nearly 5% in November to the current rate of just under 4%.

A Housing Perspective

In the 2005-2006  boom years, prices skyrocketed about 50%.  Home prices in the past few years have climbed a more modest 6% to 8%.

This spring, the U.S. median home price did fall and the cities on the East and West coasts are seeing declines.  However, Metro Phoenix home prices are still much lower than those areas.

Also, current stricter  mortgage underwriting standards and the elimination of "crazy money" are two of the main reasons, I and others believe we are not in a bubble.  The differences between the boom years and now are significant.

The Phoenix metro area saw some of the strongest job growth during the past year, according to the latest data from the U.S. Bureau of Labor Statistics.

Metro Phoenix non-farm employment grew 3.2% from May 2018 to May 2019 according to BLS data.  That marks the largest percentage growth rate among all major U.S. metro areas with population in excess of 1 million.

In raw numbers, the valley added 66,500 jobs during the 12 month period. The leading sectors for job growth include education and health services (17,200 jobs ), construction ( 15,100 jobs ) and professional and business services( 12,800 jobs ), according to the BLS.

According to the U.S. Bureau of Economic Analysis, Arizona personal incomes climbed 5.5% from the fourth quarter 2018 to the first quarter 2019.

Home Prices continue to rise in metro Phoenix, according to the latest CoreLogic Home Price Index.

Valley home prices gained 6.2% between April 2018 and April 2019, the report said.  That's still significantly higher that the 3.6% average home price growth across the country, and was about the same reported for Phoenix in March.

Mortgage rates are significantly lower than they were at the end of last year.  Mortgage rates for a 30 year fixed rate last November were close to 5%.  Today, rates are at a two year low averaging 3.99% for a 30 year fixed rate.

Between April of this year and April 2020, home prices nationwide are expected to increase at a projected gain of 4.7%, the CoreLogic report said.

Population Growth

These two Arizona cities are the fastest growing in the US, according to population estimates released by the U.S Census Bureau.

Buckeye's population saw the largest percentage growth of any city in the country, growing in size by 8.5% between July 1, 2017 and July 1, 2018.

Phoenix saw the largest numeric increase during this time frame. adding 25,288 people for a total population of 1,660,272.

This is the third year in a row that more people moved to Phoenix than any other city in the country.

The Census Bureau announced in April that Maricopa County was the fastest growing county in the country for the third year in a row.

Jobs

What may come to some as a surprise is the nature of our job market and unexpected areas that have shown increases.  Prior to the recession, most job opportunities came from real estate, retail sales and construction.  But now, financial and business services, as well as healthcare and manufacturing, are meeting, if not outpacing, the industries previously mentioned.  Additionally, Phoenix, dubbed by some as "Wall Street West," is ranked #3 on the list of cities with the highest number of workers in the financial services industry.

More people moved to Maricopa County than any other county in the nation last year, according to the U.S. Census Bureau.

This is the third year in na row that the county led in growth.

The County added 81,244 people between July 2017 and July 2018. That's up from 74,000 people during the same period the year before. 

This growth helped the County maintain its rank as the forth most populous county in the country with 4,410,824 residents.The Phoenix-Mesa-Scottsdale was the second highest among metropolitan areas in numeric growth.

Rising Home Prices May Slow

Valley home prices are expected to climb at a slower pace or flatten out during the coming year.

Housing market watchers including Realtor.com expect Phoenix home prices to climb between 4 and 6 percent this year.

This forecast is based on pending sales, population projections and recent job growth numbers.

That compares to the 6 to 8 percent annual home price increases during the past few years,

Worried about a bubble?

Home prices reached a medium price of $268,000 last summer, than dropping to $262,000 last fall. That said, if inflation is taken into consideration, home values are more than 10 percent below the 2006 boom level.

Tina Tamboer, senior housing analyst with the Cromford Report said " nothing in the current data shows a market crash coming for Phoenix."

There is some good news for buyers in that there are 4.2% more listings than one year ago, however, that only provides approximately 3.2 months of inventory, well below normal averages.