After a tumultuous two years, the real estate market is beginning to show signs of improvement. During the last three weeks, the Maricopa County absorption rate has steadily declined. The absorption rate is the ratio between active and solds: the time it would take at the current rate of sale for the inventory to be completely sold.

At present, the rate is down to an astonishing 5.5 – a few years ago, it wasn’t uncommon for a house in Arizona to sit on the market for 25-30 months. Anything under an absorption rate of 6 is considered a sellers market.

What does this mean for those of you looking to buy a home?

The time to buy a home is now – investors are snatching up properties, and the number of properties for sale has dropped significantly:

• During the last year, the number of homes for sale in Maricopa County has hovered at 55,000 – as of April 24, only 44,707 homes are available for purchase.

• In the last 30 days, 8,121 properties closed escrow.

This means more people competing for fewer properties.

While the number of homes for sale has dropped, banks and lenders are listing properties at unbelievable low prices and waiting for buyers to bid up the price within a matter of days. Realtors are getting calls from buyers who are disappointed to learn that the homes they are interested in making offers on are homes with comparable home values sometimes as much at $20-30k above list price and with multiple offers already on the table that are well above list price. For this reason, we will primarily feature properties that are private sales (or what I call retail).

What does this mean for those of you looking to sell your home?

Some tips for those of you looking to sell a home: the prices may bounce along the bottom for some time before we see a price recovery. But I can assure you that the average person (with a loan) trying to buy a foreclosure in the $100k range is up against sometimes as many as 5 or 6 cash buyers. Only one of the those people got the property they were bidding on, which means 5 other properties will be bought by those cash buyers who are getting hungrier each time they get beat out.

Tags: feature properties, foreclosure, realtors, Retirement-Communities

Posted on Tuesday, April 28th, 2009 at 12:47 pm and is filed under Buy a House. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.