by Calculated Risk on 3/11/2014 07:11:00 PM

Another "bubble" area that has seen rapid price appreciation over the last two years. Now sales are declining and inventory is increasing.

The Arizona Regional Multiple Listing Service reported Statistics for February

• Total Sales are down 17.4% year-over-year.

• Distressed sales are down 60.7% year-over-year.

• Active inventory is up 36.6% year-over-year.

Inventory has clearly bottomed in Phoenix (A major theme for housing last year). And fewer distressed sales - probably less investor buying - and more inventory means price increases will slow.

There is commentary in the release from Tom Ruff. Excerpt:

In MLS, 5,474 total homes were sold in February, 14.1% higher than 4,797 in January 2014. As the monthly sales volume comparison is clearly seasonal, one must look at the year-over-year comparisons to get a clear view of sales activity. The February 2014 sales total was 17.4% lower than the total in February 2013 of 6,630. The last time we saw a lower sales volume in February was 2008 where only 3,448 sales were reported. Last year at this tie total inventory numbers were dropping, this year they continue to climb, up 4.2% to 29,661.
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The imbalance we are seeing between supply and demand will exert downward pressure on pricing which will likely appear later this year.