Chandler housing market worsens for buyers The Chandler Arizonan

Chandler housing market worsens for buyers

Chandler housing market worsens for buyers
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By PAUL MARYNIAK
Arizonan Executive Editor

As Chandler and the rest of the East Valley stand at the beginning of the spring home-buying season, the inventory of available houses is continuing to dwindle at a staggering rate, according to the website that closely analyzes the metro Phoenix housing market.

“Although there a few exceptions, the collapse in available supply in most ZIP codes is nothing short of staggering,” the Cromford Report said last week.

Indeed, three Chandler ZIP codes are among 25 in the Valley that have lost two-thirds of their normal housing inventory in the last 12 months, the report said.

Inventory of available homes in Chandler 85224 had plummeted 73 percent while the decline in active listings in Chandler ZIPs 85225 and 85286 was 73 percent and 67 percent, respectively. Some of Chandler’s neighbors aren’t doing any better, it added, citing Tempe 85282 and 85283, where inventory was down 70 percent from a year ago.

“The current situation is even more remarkable than last month,” the Cromford Report said last month, reporting that active listings in February totaled less than 12,000 homes – down 35.1 percent from February 2019 and down 1.4 percent from January 2020.

Cromford said its analysis of available housing on the market shows the inventory shortage is particularly severe Chandler – where the lack of inventory has made it

“The lack of supply was described as shocking at the start of 2020, so I am starting to run out of adjectives to adequately describe the current state of supply. It is almost (but not quite) unheard of to see supply drop between January 1 and February 1,” it added.

In virtually every city in the Valley, the website said, the market continued to increase its favorability toward sellers – at buyers’ expense.

Moreover, demand is increasing – a harbinger of even worse news for homebuyers in the coming months, Cromford said.

“Trying to buy when supply is so low can be a frustrating affair,” it said.

“This is a truly extraordinary state of affairs reflecting above average demand meeting severely restricted supply,” it said, adding:

“Economics 101 teaches us that lower supply and higher demand is a recipe for higher prices. So far, the reaction of pricing has been muted. However, you should not expect it to stay that way.

“The spring selling season has just started and by the time we get to June a significant upward adjustment in pricing is likely.”

Supply of homes between $100,000 and $225,000 has fallen disastrously, according to Cromford’s data, which show declines of well over 40 percent from a year ago.

To illustrate the inventory crisis, Cromford picked Chandler, where there are only about 200 active listings.

“The average for Chandler over the last 20 years is 1,019,” it said, calling it a record low.

It also forecast a worsening situation for buyers, noting:

“Mortgages are becoming easier to qualify for in many different ways, so demand is likely to increase. Yet there is no sign of more supply coming along to satisfy it. In this situation the market is likely to become both frenzied and frustrating.”

One of the ways the website uses to illustrate supply and demand is an index based on trends in pending, active and sold listings compared with historical data over the previous four years.

Values below 100 indicate a buyer’s market, while those are favorable to sellers.

Avondale topped that list with a seller-friendly reading at 421, followed, in order, by Chandler (358), Gilbert (350), Glendale (300) and Mesa (287) to round up the five Valley markets where buyers can expect little inventory – and even less room to haggle over price.

“Once again we have 16 out of 17 cities still improving for sellers, despite the extreme advantage that sellers have enjoyed for many months,” Cromford said of its latest market index readings.

“Scottsdale is the only exception and even here the move in favor of buyers is very modest,” it added.

“Selling a home around $200,000 to $300,000 is easier than falling off a log,” it said. “Successfully buying a home at this price is a major challenge.”

The Cromford Report’s data for the West Valley show buyers are paying a premium to snap homes off the market in relatively short periods of time.

For example, in Chandler ZIP code 85248, 198 homes sold in the last 90 days for an average price of $441,480, according to Cromford’s data. The average time those homes were on the market was 61 days.

In 85248, the story was almost identical. In the last 90 days, 221 homes were sold for an average price of $452,057 and their average time on the market also was two months.

In 85286, the average sale price was $447,621 for the 173 homes that were sold in the last 90 days. Their average time on the market: 56 days.

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