How Many Homes are REALLY Available??
Hello, everybody, and welcome to a new episode of Merrills Monday Morning Market Madness coming at you to talk to you about the Phoenix residential housing market and exactly what is going on. I want to keep you guys informed and make sure that you understand what is going on in the market and how it might impact you. If you're a buyer or if you are a seller, I think you'll find all this information very helpful.
As always, I'd like to start off with a month's supply of inventory. It's a saturation rate that lets us gauge how much supply is there compared to how much demand right now active on the market. We have 4411 listings 12,723 listings are pending 8053 listings have closed in the past 30 days giving us a month supply of inventory of 0.55. If you haven't watched any of our previous episodes, a buyer's market would have a month's supply of inventory of five months or greater in a seller's market, you know, three months or less, and about four would maybe be balanced. But we are at 0.55. So about the lowest, it's ever been. There is next to nothing available for sale. I mean, 4411 listings might sound like a lot. But let me break it down for you a little bit. Because the problem with that is that a lot of those are not kind of your typical home that an average person would want to buy. So the 4411 active listings, only 3211 of them are single-family homes. And only 2045 are priced between 200 and 800 thousand.
And then our MLS tends to get a number of listings from Sedona and Tucson and Flagstaff and, you know, homes all over the state of Arizona. So there are actually only 1847 homes that are actually in the Phoenix metro area. Also, around 100 additional homes already have multiple offers. And that's just according to the information entered by the listing agent, many times they don't enter in when it has multiple offers.
Also, a couple 100 of them are in age-restricted communities. So I'm just kind of thinking about like, Alright, what would be, you know, your typical buyer looking for, you know, between 200 to 100,000, single-family home, age-restricted communities are also those markets are also hot. So I'm not trying to pick on those, I'm just trying to like, okay, what's your typical house, right?
And then quite a few of them are also to be built homes, builders oftentimes will list their homes in the MLS, when it is still needing to be built in, it's not available to actually buy and move into today, it might not be able to close for six months or longer. So once you kind of back all of those things out, there are only 1290 active listings, right? And by the way, only 600 of those have been on the market for longer than seven days. So we're talking like almost nothing on the market that's actually staying on the market 600 homes for a metropolitan area with a population of around 5 million people. Not a lot of homes to go around.
I mean, I saw a stat that said Phoenix gained, the population grew by an average by about 80,000 people in 2020. So let's just assume that the growth rate is holding for 2021. So far, I don't have any metrics on that. We've got a couple 100 people on average moving here a day, a day. And there are only 600 and something homes on the market that don't already have multiple offers or that have even been on the market for longer than a week. The monthly supply of inventory for that kind of typical home, you know, 200 800,000 not in an age-restricted community. All that stuff that we just talked about, is 0.35. So essentially a little over a week, 10 days, about 10 days of inventory available.
It's dire, it's really dire and it's actually really frustrating. buyers who are in the market right now are pulling their hair out. Many buyers are making multiple offers on homes, you know, you would sometimes have to make an offer on 678 10 homes before you get one accepted. I know that myself and my team have personally had transactions where our buyers have gone as much as $50,000 over the asking price and still have not gotten it left and right buyers are waiving appraisal contingencies and shortening their inspection periods. Some buyers are even waiving their inspection periods and still not getting the home.
So it's you know, it's really, really really really low in inventory. So if you want to sell right now our view that had any thoughts of selling the market is really primed for you to be able to get an absolutely fantastic price. And we'd love to have a conversation with you about it. Your home is most likely worth a lot more than you think because we've seen dramatic home value increases Just in the past couple of weeks, let alone the past couple of months. And then, you know, I just thought I would end on, you know, the conversation of like, how did we, how did this happen? Like, how did we get here? Like, why is inventory so desperately dire. And there are so many moving parts to that, but I put it down to probably two or three main things that have contributed to this. The first is the pace at which builders are building, it doesn't come anywhere close to matching the demand. Especially when you look at the years like 2009 2010, through 2013 14, there was hardly any new home construction going on, however, the population was continuing to grow.
So we never really made up for those last years of homes not being on the market, I mean, of homes not being built. But now, even still, I think that buyers are being exceeded not exceedingly, they're being that they run their own business, and rightfully so they're trying to be cautious. They don't want to get caught in another situation that they were in 2009, or 2008, or 2010, or whenever it hit them. And they're not really building homes as fast as we need them to, to keep up with the population growth. But also, you know, they, you know, they're raising their let's be honest, like they exist to make a profit, just like any other business, and they're raising their prices on all their homes by $10,000 a month.
So why should they rush into you know, they already bought the land right about the last two years ago, or whenever it was. So they've already got that kind of set cost. And they're just raising their prices by $10,000 every single month, because they can, sometimes even more than $10,000 a month, some of them are raising their prices, it seems like $5,000 a week. And I don't think they're price gouging, by the way, they're just keeping pace with the market. If anything, there are some really good values with new builds right now, compared to what's available on the resale market. So anyway, the building is the first problem. The second problem is interest rates, no problems. It's a blessing, right? The interest rates are insanely low right now. So everyone wants to buy Well, they can including investors, a lot of investors are saying, Hey, you know what, I really like the idea of being able to buy this rental property and lock that super-low 2.something locks the interest rate in for the next 30 years is going to guarantee me incredible cash flow on this property, where By the way, rent prices are also skyrocketing because the rental market is seeing the same thing that the sales market is no inventory. And this is all fed by this, you know, population growth. So those are some of the big key things, I think, you know, lack of building and super low interest rates.
And then lastly, just seems like I mean, you know, I'm sure a lot of places fill out this, but it just feels like a ton of people from California are coming right. And their markets are still pretty hot, too. It's not like they're in a buyers market and everyone's just leaving, they know, their markets are still hot as well. they're experiencing some of the same things. We have so much growth, so many businesses, so many things coming to Arizona, because the cost of living is better here, right? I mean, if you have a job in California in the Bay Area, and you're making Bay Area money, but you can move to Arizona, keep your same job now because you're working from home and buy a house at a third or a fourth of the cost, you know, and get a way nicer house. You know, that's a pretty exciting thing for a lot of people. So all those things contribute to our problem, which is only getting worse. It continues every single week we get into more and more dire inventory situations. We continue to predict that home values will rise by at least 20%. This year, we've already seen somewhere around 8% and we're only two months in and we're not even into our busiest selling season yet. So buckle up. I hope you found this information helpful. Let me know if you have any questions.