We began 2020 with normal demand while seeing a 31% decline in homes for sale in metro Phoenix. This lack of supply was described by Michael Orr at that time as “shocking”. Although during the first six months of the year demand was uneven due to the Covid outbreak, during the final half of the year sales soared, with 5 of the 6 final months of the year reporting the highest sales volume in MLS history. 2021 is beginning with a 48.6% decline in listings coupled with above normal demand. If the lack of homes for sale beginning last year was shocking, how do we describe the current situation? Buyers seeking homes under $500,000 would call it “desperate”. The number of homes for sale in that price range have been no where near high enough to meet demand, and that lack of supply has resulted in aggressive bidding wars. The price of those homes have risen sharply, accelerated due to the huge imbalance between supply and demand. And due to the on going supply constraints, prices can’t help but to continue to rise in 2021.