Market Update

It has finally cooled off in the Phoenix area and, as we head into Halloween and the rest of the holidays, our market is still shifting.  We continue to add more listings which adds more inventory and we are seeing a steady drop in sales (since April).   This is great news for buyers as the current conditions allow for more successful negotiation.  Buyers are in an even better position as interest rates are anything but scary at the moment.  Sellers are needing to bend a little to get the sales these days.  The reason is simple, there are more choices out there for buyers.  The sellers that are realistic with price vs condition are still selling successfully and quickly.

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Inventory is up, interest rates are causing some uncertainty, and buyers are still buying but are mostly only interested in “move in ready” homes.  If you are trying to sell and your price isn’t up to par with your condition, you might be waiting a long, long time for that perfect buyer to come around.  Most buyers are looking for “bring my toothbrush and I’m done” homes.  We are still working with the buyers that are looking for a home to fix up themselves but it’s few and far between and they are not paying market value (or in some cases anywhere near market value) for these properties.  Advice to buyers…negotiate!  In some cases, good ‘ol fashioned negotiation is back in action.  Ask your agent for their advice, though.  There are situations where this isn’t working.  Advice to sellers… make your home PERFECT and, more importantly, price it perfectly for the quickest, most favorable results.

Real estate is cyclical.  Every year we seem to have a bit of a spike in activity in the summer months beginning in April and lasting until the end of June.  It seems like that little summer spike has been a bit delayed this year as we still hover at the balanced market point into the early days of July.  I don’t know about you but I certainly turned my AC on earlier this year than I remember in the past.  Could it be that the Valley cooled off in the real estate world as we began to heat up outdoors?  Possibly.  Stay tuned for Fall 2014…the spike has yet to arrive.

YES!!! Almost as much as the price of the home itself because the interest rate that you are being charged directly impacts the affordability of the home you want to own.

Here’s an example:

If the home that you are after is priced at $250,000 and you offer on the property today, your interest rate is likely to be approx 4%. Your principal and interest payment would be $1,193.54.

If you wait and interest rates go up even a half of a percent, that same purchase price will cost you $1,266.71. This is a difference of $73.17 a month!! That’s the cost of a week’s worth of groceries for some people and that’s all due to a 1/2 of a percent increase. Now, imagine what it would be if rates went up to 5% or 6%, which they have been in the not so distant past. You are talking $1, 342.05 and $1,498.88 respectively for that same $250k home.

What happens when you wait and the prices go up AND the interest rates go up? You will likely be buying much less house for the same money.

At this time, interest rates are very low and pricing seems to be somewhat stable. This is the busiest time of year though and we anticipate that to change on a dime especially since our listing inventory indicates that we are in a sellers market.

Advice to Buyers: Get your home NOW. Waiting will cost you MONEY. Advice to Sellers: You still need to be the prettiest or the least expensive home on the block to have the most activity at this very moment. Make sure you are using every trick in the book to accomplish this including an attractive marketing package. If you don’t know what that means, call us!

The real estate market is getting hotter and hotter as we enter the summer season.  We are under 4 months inventory which means we are in a sellers market.  Some sellers may not have realized this yet so, if you are a buyer making offers now, expect multiple offer situations real soon if it hasn’t happened already.  Time to step on the gas pedal, buyers.  Interest rates are down at the moment but may not last and the deeper and deeper into a sellers market we get, the higher home prices will go as well.