Daily Observation by Michael Orr

Courtesy of Michael Orr / The Cromford Report

Michael Orr, Director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University shares this Observation today... 
 

June 23 - Currently Greater Phoenix homes buyers and sellers seem to have all the enthusiasm of English football supporters at the World Cup. Supply, demand and the spirit of English football are all well below normal and still going down.

Usually when demand is weakening, supply increases, so exacerbating problems for sellers. Since April, the rate of new listings being added has instead been dropping and so far during the second quarter new listings have totalled 27,068 which is 0.7% below the same period in 2013. Meanwhile demand has been bumbling along well below normal and showing little sign of building any momentum. In summary we have a subdued and quiet market for single family and condo purchasing, while rentals and multi-family development are getting the bulk of the attention.

Although there are a few signs here and there of lenders cautiously easing underwriting restrictions, the changes are only small and slow to happen and therefore having only a minor impact on demand. Home Equity Lines of Credit are back in fashion again having been unmentionable a couple of years ago. Mind you, a lot of homeowners still have little to no equity to draw on. Those who purchased between 2009 and 2012 are in the best position to be able to use their home as collateral for a loan.