I noticed an uptick this morning in the graph above for the inventory of Tempe single-family homes for sale. There are now more than 350 actively listed homes on the market here. Over the last two years, Tempe has had only an average of 290 single-family homes for sale at any one time.

Tempe Inventory Market Trends

The 7-day moving average broke above a level not seen since April 2015. Does this mean that the market is slowing down? Not necessarily. Rising inventory alone doesn’t automatically mean that the real estate market has a headwind.

But it does mean that this trend could continue to plague sellers of Tempe single-family real estate if other factors come into play. I first checked the price per square foot metric. It looks strong rising almost unabated for the last 36 months. From $140 to $173 per square foot. That looks solid.

 

tempe arizona home price per square foot

 

Analyzing Tempe’s MAI

I then reviewed the MAI chart for Tempe below. This is the Market Action Index. This metric is a measure of market conditions where a number greater than 30 is considered a seller’s market (high buyer activity, low inventory) and less than 30 is a buyer’s market (low buyer activity, high inventory). Thirty is in balance. At first glance, things seemed to check out here too. The MAI reading is 40.47 and reflects that sellers are in control of this segment of the Tempe market.

At first glance, things seemed to check out here too. The MAI reading is 40.47 and reflects that sellers are in control of this segment of the Tempe market.

However, the MAI is just now beginning to turn down toward the neutral zone of 30. Notice too, the MAI did not turn down until the July market peak of the prior two years. Both of these seasonal peaks were deeper into a seller’s market. If the 2017 Tempe single-family market is peaking now, buyers will have greater flexibility here in the coming months than in the recent past.

Effect on Tempe Market Confidence

If this move is just a glitchy pullback in market strength, it won’t shake seller confidence before it resumes. It is notable that the MAI has not retraced in June during the last 2 years.

 

tempe arizona real estate market graph

I’ll check these three metrics for the Tempe single family home market in a few weeks. Two out of three have stuttered. If the price per square foot begins to give up ground in the coming weeks and months, it may portend a softening of the Tempe real estate market.