Is Housing Returning to a Balanced Market?

December 26, 2013

One of the best gauges of whether a housing market is considered a buyer's market, a seller's market or a balanced market is Months of Inventory. This measurement shows the relationship between active listings (supply) and closed sales (demand), and essentially tells us how long it would take for the current inventory of listings to sell at the current sales rate. 6 months of inventory is generally considered a balanced market, meaning a balance between supply and demand. Below 6 months moves towards a seller's market and over 6 months a buyer's market. A market close to equilibrium is good for buyers and sellers, bringing longer term sustainable growth.

Both the Phoenix and Tucson markets have been experiencing a seller's market for well over a year, highlighted with low listing inventories. Recent data shows an end of the year increase in active listing inventory and months of inventory. This may indicate the market seeking equilibrium, or possibly just a return to normal seasonality trends. Sales data after the first quarter 2014 should paint a clearer picture of where housing supply and demand trends are heading. For Green Valley, we are seeing normal seasonality trends and Sierra Vista is experiencing a slight improvement in market conditions compared to 2 years ago.

Make sure you contact your Long Realty sales associate to find out what is happening in your neighborhood and to keep track of emerging market trends.

Phoenix

Tucson

Green Valley

Sierra Vista

Data is based on information obtained from ARMLS, TARMLS, GVSAHMLS and SEAMLS on 12/05/2013 and is believed to be reliable, but not guaranteed.