Supply Shortage Under $300,000 Continues to Plague Buyers

Weekly Listings in Arizona across Phoenix including Mesa, Las Sendas, Boulder Mountain, Red Mountain Ranch

Active listings for sale continued to decline each week in July, however it appears to have leveled off between week 31 and week 32. This provided a slight relief for those buyers who have been overwhelmed by increased competition for homes and multiple offers. Week 32 in 2015 was the first week of August and supply measured 19.7% below the same week last year. Active listings dropped by 4,350 going from 22,047 active listings to 17,697. Supply is still 11.4% higher than it was in 2013, however there is far less selection under $300,000 for buyers.

Phoenix, Scottsdale, Mesa, Chandler, Gilbert and other Valley homes under contract between 2013 and 2015

RESIDENTIAL RESALE DEMAND TRENDS

Listings under contract has also been declining, but the decline is not outside of normal seasonal trends. Listings under contract are those properties that are scheduled to record as sales sometime over the next 4 to 6 weeks, making it a leading indicator for future sales volume. Week 32 in 2015, measured 7.4% higher than the same week last year and 12.3% lower than 2013. Demand was higher in 2013 due to investors capitalizing on the abundance of foreclosures and short sales under $200,000. To see a significantly greater increase in overall contract activity and sales volume, more move-in ready properties would need to be available on the lower end for first-time and lower-income buyers. With only 4,833 available and 4,500 under contract, there isn’t much room for this market to expand in sales even though there is significant demand. Buyers cannot buy what isn’t for sale.

Mesa, Arizona residential real estate listings change

Homes selling in Mesa, Arizona communities by price range

The market is still hot between $200,000 and $300,000. The 19% decline in competition combined with a 21% increase in contract activity puts sellers at an advantage. Over $300,000 is seeing a significant improvement as well, however there is more supply for buyers to choose from in this range which balances out the advantage between the two sides.

The Listing Success Rate measures the percentage of listings that successfully close versus cancel or expire when coming off of active status in the MLS. Currently, normal listings have a success rate of 77%, a 7% increase from this time last year. Short sales saw a 14% increase from 50% to 64%.

HOW MESA COMPARES TO THE OVERALL MARKET

Mesa’s trends are reflecting the overall market. Supply is down 22.8% from this time last year and still 5.2% above 2013. Demand is up 8.7% from 2014, but still 6.5% below 2013. Listings are seeing a 79% success rate, up 6% from this time last year. The supply shortage is primarily under $300,000 in Mesa, as it is across the Valley. Listing Success Rates are also highest under $300,000 in Mesa.