Chandler AZ Real Estate Observation (480) 868-3814

Chandler AZ Real Estate Observation

by jay mecray (480) 868-3814

Chandler AZ Real Estate Observation

Once again we are showing Chandler as one of the Large Market Index values for the single-family markets in Arizona.

If you thought last week’s average 8.4% decline was impressive, then you will be even more impressed with the 10% fall we have in Chandler this week.

This is not uncommon this time of year as inventory increases; in fact, most cities in Maricopa County dropped over 10%.  The common story in Chandler AZ is that listings are going under contract “slower than usual” which makes active listings in Chandler build up in numbers.  We are NOT seeing an increase in the number of new listings arriving in Chandler again, which is typical this time of year..

Despite the declines in Chandler, all the cities in Maricopa County are still in the seller’s market zone over 110. Remember that 100 represents normality.   Chandler is currently well over the seller’s market zone at 185.2 and Chandler’s market is still much stronger than it was for most of 2014.  We are approaching a more balanced market at fair clip, but given the continued weak supply, we are very unlikely to overshoot the Chandler Market.  We would need a large increase in supply to create a buyer’s market in Chandler AZ.  It is not at all obvious at this time where this extra supply would come from.  The situation is very different from 2005 when tens of thousands of empty  Chandler homes had been purchased by speculators with “ill-advised” and reckless loans.  Anyone who thinks the current situation in Chandler AZ is a bubble bursting is very much mistaken.  It is merely the normal process of an “over-heated” Chandler market cooling down, something we expect to see several times a decade.  True bubbles in housing tend to occur once or twice a century in Chandler AZ.

Jay Mecray Commentary: Once again, I find myself essentially highlighting the entire Chandler AZ Observation. It’s so important to be able to counter sensational headlines and exaggerated points of view when it comes to the Chandler Market.  Everyone tends to paint with a broad bush and that typically will not apply to many markets including Chandler AZ.

For those who fear another Chandler bubble burst I would reinforce and add to what has been quoted above:

  • The crash of 2005 – 2007 was driven by “lier loans”
  • By contrast, today it’s an ‘equity’ market
  • ‘True bubbles in housing tend to occur once or twice a century’ – we had the ‘great depression’ and we had the crash of the last decade
  • The next generation (millennials) are about 5 years behind their predecessors because of economic factors
    • A Sotheby’s International Realty research add-on is that the millennials are about to be the beneficiaries of the largest transfer of wealth in the history of the world
  • That being said there is a housing shortage in Chandler, particularly in affordable housing

Again, as a talking point, I like the verbiage ‘it is merely the normal process of an “over-heated” market “cooling down”.

The evidence that we are still more in a sellers market is evidenced by the above Chandler Market Index.

Finally, keep in mind that yesterday’s Chandler Observation, where we emphasized to be accurate and add value, we need to parse specific market trends by location and price range – we rail against the broad brush!   JM

Jay Mecray – Ask Jay, Your Personal Real Estate Expert in Chandler Arizona
(480) 868-3814

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