Subscriber Exclusive

Low inventory continues to plague Glendale home buyers

And it could be that way in the future, even with new subdivisions

Posted

As of Tuesday, there are a couple ZIP codes in Glendale that sum up the Valley’s frantic real estate scene, and by the time you finish reading this sentence, the trends will likely already be different.

Available inventory remains tantalizingly low.

Consider 85305, from Northern Avenue to Camelback Road, bordered roughly by 83rd and 99th avenues, which includes the Westgate Entertainment District. In January, there were 48 homes listed for sale among the roughly 6,000 homes within that ZIP code.

On March 1, there were two.

“This is true citywide,” said Greg Hague, who owns 72SOLD and has been around the Valley real estate industry since 1981. “Every single week the inventory has continued to drop both locally and nationally.”

North of the Loop 101, meanwhile, in the 85310 ZIP code, roughly between 35th and 75th avenues up to Happy Valley Road, there is an “absurdly low” inventory, to use Hague’s words, of four homes priced $800,000 or lower. Complicating things for hopeful buyers looking in that area is the low turnover rate for homes.

With around 6,900 total homes in that ZIP code, Multiple Listing Service (MLS) shows an average of around 40 home sales per month, or roughly 480 in a year. That translates to a turnover rate of 7%, meaning the average resident lives in their home in that area for 13 years, so it’s rare for homes even to become available.

“Very, very slow turnover in that market,” Hague added. “Typical in this area is around 10%, 11%, 12%. The average time people might live in their home in the Phoenix Metro market is more like eight years, not 13 years.”

Industry tracker Altos Research aptly dubs Glendale “a seller’s market” as of Tuesday, although that’s not unique to Glendale. The lack of inventory, however, is an ongoing issue in Glendale, when considering that Paradise Valley, which has 6,000 homes total, has 54 homes actively listed, although only half of those are under $5 million.

On the other hand, sellers appear to be in a very competitive spot. Hague estimates that Valley homes will continue to rise in value at a rate of 2% per month.

“With so little inventory and people reluctant to sell, we’re gonna have crazy high appreciation for the foreseeable future,” he noted.

Realtors are seeing a higher proportion of out-of-state buyers, including from familiar places like Southern California and Chicago. But Hague for one has seen more buyers coming from Seattle and Washington state than ever in his 41 years in Valley real estate.

The average lower- to mid-price home buyer, he characterizes, is already here.

“Lives in Phoenix, has a job, has a family,” Hague generalized. “You have some first-time buyers. They’re at the lower end generally. But it’s the Phoenix resident, the working person, and they’re buying these homes in the we’ll call it the $400- to $900,000 price range. There’s almost nothing in the 2s ($200,000 range). The 3’s is very entry level now. And then 4s, 5s, 6s, 7s, 8s is the Phoenix working person, family.”

There’s more wearying news for buyers.

A drive through any Valley city shows developments under construction and municipal planning commissions approving more new ones still to come. Just because homes will soon be constructed, Hague cautions, doesn’t necessarily mean the inventory shortage will reverse. At least not while average working people and families aren’t the only ones doing the buying.

“Investors are snapping up those new homes and renting them. Billion-dollar investments on buying whole subdivisions,” Hague said. “The average buyer can’t go out and buy them because investors are buying whole subdivisions. That’s happening all over the country. Billion-dollar investment funds because they’re seeing homes as a better investment than stocks, with no plans to sell in the next 10 years. Just let it rent and make good cash flow.”

Sellers, on the other hand, have a much more competitive view of the situation, including the only four lower-priced inventory owners in the 85310 ZIP code.

“Those are for sale as of today,” Hague said, before adding with a laugh, “that doesn’t mean they will be tomorrow, just FYI.”

Glendale, Arizona, real estate, homeowners, buying homes, Greg Hague, 72SOLD