The Arizona Regional Multiple Listing Service (ARMLS) aggregates and publishes sales data from the five Realtor associations that serve Maricopa and western Pinal Counties. ARMLS data does not include properties that are not entered into the MLS, such as those for sale by owner or exclusive listings. At the time of this writing, the most current report available is from May 2007. The accompanying chart offers a comparative snapshot of a few key metrics for the month of May from 2002–07.


From this data, we can clearly observe the boom cycle of 2004–05, when inventory levels and days on market fell to historical lows and were mirrored by increases in the number of units sold and median sales prices. This is an elegant example of the law of supply and demand at work. Just as quickly as the market heated up, we see evidence of the cooldown that has been in progress since 2005. The supply of homes for sale jumped rapidly as investors exited the Valley en masse in pursuit of the next great opportunity. The increase in supply, coupled with a drop in the actual number of buyers, has lessened the total number of units sold and is beginning to affect sales prices.

Inventory levels and average days on market (ADOM) in May 2007 remain well above recent historical norms for the month. In May, there were over 51,000 single-family homes for sale, which equates to a ten-month supply of inventory based on unit sales. A balanced market supports around a sixmonth supply with inventory of 25,000 to 30,000 units, so we should be prepared for a prolonged correction.

Surprisingly, sales prices have remained fairly steady over the past twelve months and have actually risen since the peak demand of 2005. I expect we’ll see continued downward pressure on pricing until the excess inventory is absorbed.

While no one knows what the future has in store for Arizona, more than five decades of consistent growth and economic prosperity point to a bright future. Federal data reveals that Arizona has been among the top states in the nation for more than fifty years in key indicators, including population, employment, and personal income growth. Collectively, these growth indicators support a healthy housing market.


Economic and personal-income growth fuel population growth by making our state more attractive to nonresidents. High population growth is critical to a sustainable, healthy real estate market.

According to Arizona State University and the Arizona Department of Economic Security, Greater Phoenix has been growing at a pace of more than 100,000 new residents per year since 1995. Furthermore, the U.S. Census Bureau predicts that Arizona’s population will more than double between 2000 and 2030 from about 5.1 million residents to almost 11 million, and will move from its current position as the twentieth- to the tenth-most populous state. Even if we fall short of the government’s prediction by a few million residents, the overall effect on our housing market will remain positive.

While most industry experts agree that the long-term outlook for the Greater Phoenix real estate market is favorable and balanced, what about today’s home seller? What can he or she do to cope with the challenges of our market?

I’ve put together the following list of five qualities, or building blocks, that any home seller can follow to consistently yield above-average sales results regardless of market conditions. They’re equally important and just as relevant in a seller’s market as they are a buyer’s market.

1. Right-on pricing The most accurate way to develop a pricing strategy is to put yourself in the shoes of a prospective buyer and visit several homes for sale in your community that are similar to yours. Only after you know how your home stacks up against the competition in terms of features, upgrades, and condition can you price it appropriately. Buyers today visit many homes and can immediately notice when a home is not priced consistently with similar homes.
2. Standout staging You should never open your home up to a prospective buyer until it’s ready to show! Buyers in today’s market are rare and valuable commodities, and you will only get one chance to impress them. Whether you lean on the experience of your Realtor, hire a professional home stager, or do it yourself, make sure you’ve tidied up, decluttered, and made necessary repairs or alterations to prepare your home for sale before you put the sign in the yard.
3. Aggressive marketing The goal of any home seller should be massive exposure of his or her home to as large a pool of prospective buyers as possible. Your marketing plan should include a print component to attract local homebuyers, as well as an extensive Internet strategy to attract global buyers. The fewer buyers there are in the market, the more important it is to extend the breadth and depth of your reach.
4. Diligent follow-up Every single buyer who visits your home should receive a follow-up phone call for feedback the day after the showing. Over time, you may receive consistent criticisms that give you the opportunity to adjust on the fly and position yourself more favorably for the next visitor.
5. Smart negotiating Many buyers and sellers focus so intently on getting their price that they overlook other factors that could mean the difference between a successful deal and a parting of ways. Before you rush to the negotiating table and risk losing a valuable buyer or the house of your dreams, take time to learn what’s important to the other party and compare them to your goals. Once you understand how your interests align, you’ll be in a better position to put together a win-win deal.

Justin A. Lombard, MBA, e-PRO is the team leader of award-winning Trust in Justin & the Casa Crew at Keller Williams Realty Platinum. You can visit Justin and his team at trust-By Justin A. Lombard, MBA, e-PRO, Keller Williams Realty Platinum in-justin.com.

By Ashley Lichty

For months now, you’ve heard the media and industry experts moan about how the real estate market is in a dive, the housing bubble is about to burst wide open, and the national median home value is decreasing. If you’re tired of all that bad news, here’s some good news for you: the real estate market really isn’t as bad as they say. Maybe, by looking at the state of the market on a national level, it has the appearance of such a gloomy forecast. In reality, the real estate market varies from area to area, and the national home-value median isn’t important for you to know if you’re thinking of buying, selling or relocating. (But if you’re curious, the median home value in 2006 was $221,900). The only market you should be worried about is the one in the area you’re selling or buying. Before deciding to sell your home, or move to a new area, it is important to get an idea not just of the average home value and rate of sale, but the economy, employment, and attractions in that area.

Arizona is well known for its bustling capital city of Phoenix, a hot spot of cultural, natural and historical value. The whole state of Arizona has much to offer residents or visitors in the way of job opportunities, real estate, and attractions. The economy is based around agricultural production in cattle, cotton, dairy, lettuce, and hay, while their industries focus on mining, electric and transportation equipment, machinery, printing and publishing, food processing, electronics, and tourism. These markets are steady enough so that job opportunities are all around, keeping the state a prime locale for new residents, which in turn helps stabilize the real estate market and home value averages.

Arizona is also home to one of the Seven Natural Wonders of the World, the Grand Canyon, which is the biggest tourist draw in the state. Other attractions include bustling nightlife of the major cities of Phoenix, Tucson, and Flagstaff (where visitors and locals alike partake in the myriad bars, billiards, casinos, and music and comedy shows available) as well as the many museums and festivals dedicated to the cultural arts. With a large Native-American population, Native ruins and historic and cultural sites are always a big draw, as are any sites having to do with the Old West. With so many different things to do, it’s no wonder Arizona has been one of the top recipients of new people moving in from another state. Arizona is currently home to 6,166,318 people, with the unemployment rate for April at about 4 percent, just a bit of an increase from the historical low of 3.9 percent from the previous month (March 2007). As of 2004, the median household income was about $43,696, which most likely increased to about $45,000 or so by the end of 2006. The median home value in Arizona is currently $306,877 for a home a little over 1,700 square feet.

Most real estate professionals agree that Arizona’s market has definitely shifted to a buyer’s market and the huge inventory of houses for sale help keep the home-value averages down. Even the median home value for the greater Phoenix is down somewhat from what it was this time last year. Until the inventory of homes levels out, home value averages are likely to stay down. If you’re looking to buy in Arizona, now is a great time to do it. If you’re trying to sell your home, be patient, because it may be a while. Supply is too high and demand is too low for Arizona home value averages to stay as high as they were a year ago. Most realty professionals predict that the market will slowly begin to rise again as long as the huge gap between buyers and sellers begins to balance out.