Supply has not been growing as much in the first week of October as it has in past years, this is disappointing for some buyers who would appreciate more choice in the marketplace.
Weekly new listings are in line with last year so far, however listings under contract are up 13% over last year, which is causing overall supply growth to be sluggish.
The biggest increase in demand is within the $200,000-$300,000 price range, which had a 35% increase in listings under contract heading into October and only a 4.2% increase in supply.
Sales in this price range represent nearly 32% of all sales thus far this year and listings under $200,000 represent 41% of all sales.
Not surprisingly, the higher a buyer can go in price, the more choice and negotiating advantage they have.
Sellers in some cities are experiencing more competition from new home subdivisions.
New construction permits are on the rise this year, which provides relief to buyers and headaches for the surrounding sellers.
Builders have been focusing a decent portion of their resources on the $200,000-$500,000 price range, the increase in competition is especially felt by sellers in North Phoenix, South Phoenix, East Mesa, Gilbert, and Peoria.
As a result, annual appreciation has been maintained at 3-4% for the $200,000-$350,000 range and 1-2% for the $350,000-$500,000 range.
Builders are not focusing on the under $200,000 market, which is contributing to appreciation rates as high as 9% as demand remains strong.
The luxury market is still seeing flat or slightly declining prices compared to last year.