The strength of a real estate market has always been closely tied to supply and demand. When the inventory of homes available for sale (Active listings) is low and the demand for homes (Pending listings) is high, you have a strong market. This type of market usually drives prices higher. This is what happen to the real estate market in Arizona in 2005. As the inventory goes up and the demand goes down, you have a weak market. The opposite happens here and prices go down. This has been what we’ve seen since the beginning of 2006. On a weekly basis, Windermere Real Estate/Phoenix NW office tracks the number of active listings (Supply) and pending listings (Demand) and puts these into a chart that shows both lines and the direction they are moving (Supply & Demand Units). As the lines move towards each other (low supply and high demand), we are moving in the direction of a Seller’s Market. As the lines move in opposite directions (high supply and low demand) we are moving towards a buyers market. We also convert these two figures into a ratio that tells you what kind of market we are currently in and what direction we’re moving (Supply & Demand Ratio). A balanced market is usually within 20-30%. Anything below that is a buyer’s market and anything above would be a seller’s market.
Filed under: Real Estate Market Watch | Tagged: phoenix real estate market, real estate market indicator, supply and demand
[...] the Anthem AZ Real Estate Market moving back towards a Seller’s Market? In our post on what makes a real estate market strong or weak, we discussed that it is closely related to supply and demand. The Anthem real estate market has [...]