Recovery Underway, but Supply and Demand Out of Balance

You could say that Phoenix is a seller’s market this spring, although there’s very little real estate to buy. Michael Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business, reports that with interest rates low, the economy beginning to stir and prices very affordable compared to salaries and rental rates, a swift recovery could be in the cards. But supply is so tight that “buying a house is often quite a struggle,” he said. Supply is down 42 percent, he said. In fact, the inventory of homes under $250,000 is only a 25 day supply -- highly unusual. Bottom line? After several years of confusingly volatile conditions, the market is now in clear focus: it is very imbalanced.