Saturday, November 19, 2022 / by Bryan Baylon
The weakness of demand has been highlighted in the media but there has been relatively little discussion about the weakness of housing supply.
When we look at new listings arriving into the ARMLS database, we see a startling drop off in all the numbers. The column chart below shows the new listing counts for the first two weeks of November since 2005.
We can regard something around 4,250 new listings as normal, but in 2022 sellers have come up with fewer than 3,000.
Coming soon listings are also far below this time last year with around 400 which compares with over 600 in November 2021.
Back in 2005, when we experienced a rapid cooling of demand during the second half of the year, this brought on a lot of listings from people trying to exit the market before prices fell. There were large numbers of empty homes that had been purchased for speculative reasons. The situation now is completely different. A far higher percentage of homes are occupied and the high mortgage rates means moving home will eliminate a nice cheap mortgage and most likely require a new expensive one to take its place.
When we segment the market by dwelling type we can see that condos and townhomes are the most affected - new listings are down 38%. Single-family detached homes are down 33% while mobile and manufactured homes are largely unaffected.
Homes priced over $1 million are also little affected by the shortage of new listings.
Several of the central cities are experiencing a large drop in new listings - Phoenix is down 43%, Tempe down 37%, Scottsdale down 35%.
Gilbert is down 41%, Chandler down 47% but Mesa is only down 24%. On the west side, Peoria is down 47%, Glendale down 31% but Surprise down only 21%
With such a shortage of new listings, the downward pressure on pricing is moderated and overall active listing counts are starting to decline in the majority of areas.
Market insights provided by the Cromford Report.