If you're here for the meat and potatoes, you at the right dinner table No fake hype, no sales pitch, just the 100% ARMLS facts. Anyone that is telling you that the market will tank will at some point be right, it's just not happening in 2021.
I love numbers, how about you? The problem is that most people do not. And it's even harder to translate numbers into words which is why most agents do not have this data.
Everyone has their own preconceived idea as to why the real estate market is why it is today. The fact is, that everyone is partially right. It's not just ONE single reason. My favorite is hearing 'it's all the cash buyers from California'. That's a little bit true. You can't ignore the fact that Arizona is the #3 inbound migration state with Texas as #1 and Florida #2. With California having the the highest departure rate in history, this will certainly continue as many of the new tax laws are imposed on California residents.
Affordability is the only thing that will SLOW our market down but when I say slow, it just means it's going up at a slower rate. Buyer demand actually slowed down a tad over the holidays, but so did supply so the overall market continues to climb.
Yes prices have climbed quite a bit! The same house that would have cost $259,995 in 2018 now costs $328,000 BUT the mortgage payment has only gone up $23/month. SHOCKING! Buyer's today will need to bring in a larger down payment but because interest rates are so low, it's about the same monthly cost. And yes, look at the numbers from 2011. People waiting for that to happen might as well just hope for Armageddon. It's not happening people. It's not.
There is a LOT of buyer frustration out there right now and understandably so. Being that I am predominantly a listing agent, I have real-time knowledge as to why buyers are not getting in to homes.
#1, they do not have enough cash to go above appraised value. There are some listing agents that are requiring the buyer completely remove the appraisal contingency (I do not). When you ask the agent why they are doing that, their response is 'because we can'. TRUE
#2, their agent does not know how to write a competitive offer. I currently have a listing on the market that is being sold via USAHomebids.com which is an online bidding platform (bidding doesn't end for a few more days). This is noted in several places for the Realtor to see, even a video to explain. An agent text me (not call me) asking if I had any offers and when I responded with the details about the online bidding platform he responded with 'Ooo, we already wrote the offer.'. I can't imagine any offer being attractive to a Seller when the Buyer has absolutely no idea what is important to them. The problem is that these buyers have no idea how good their agent is or isn't.
#3, buyer has unrealistic expectations between what they want and what they can get into. A fellow agent has a buyer that is prequalified up to $400K, does not want to spend more than $350K, wants a home that looks like the new San Tan Valley homes but in Chandler or Ahwatukee. When the agent found a perfect home at $360K, the buyer didn't even want to go look at it because it was too much. The problem is, the longer they drag their feet on either the price point, they will be completely priced out. They actually already are. By the way, the difference in monthly payment between $350K-$360K is about $30. One less night eating out.
So where is all this new housing going to come from? You got it. Further out!
More specifically, here are the single family homes coming later this year.
There's been this frenzy for so long and so much talk about not enough inventory, the consumer doesn't realize that 2020 was actually the #2 year in volume of sales EVER and the #1 year EVER in revenue.
Thankfully we do not have many, if any, of that orange anymore. AND if you think there is going to be any foreclosures popping up because that is what the news says, that's what a guy on YouTube said or that's what you are secretly hoping for, it ain't happening. Anything over 50 on this contract ratio chart is HOT, Chandler's 85224 is currently at 414. You can see where all the hot spots are on this heat map. Most of these areas are hot because of employment. North Phoenix is the massive Taiwan Semiconductor Manufacturing plant. Goodyear’s focus on business-friendly customer service and attracting companies such as Amazon, Microsoft, Dick’s Sporting Goods, REI, United Parcel Service, Ferrara Candy Co., Fairlife and many others earned the city 2020 Best City for Business honors from the Arizona Chamber of Commerce and Industry. And anyone that says freeway access is a bad thing for values should probably look at what has happened to all areas affected by the lower west 202 extension that opened in 2019.
Year in Review:
2nd highest volume in transactions ever in the Greater Phoenix area.
Best Luxury Year ever!
Median of 14 days from date listed to under contract
#3 State for inbound migration
Appreciation rate for resale December 2019 to December 2020 - 17.4%
Prices in 2021 will continue to rise most likely throughout the year. May slow down (not decline) as demand wanes with rising prices.
Short term decline in rental rates due to the new lower-end leases being written once moratorium lifts. We will see it recovery and continue to rise as the year progresses.
NAR's Chief Economist and Senior Vice President of Research, Dr. Lawrence Yun has said interest rates are now not expected to move until 2023.
If you need to move, move.
If you don't need to move, expect to pay top dollar or more.
Buyers - Save more cash, work on your credit scores (try to get away from FHA loans right now) and be willing to not find the 'perfect home'. You'll have time to make it perfect for you!
I'm never too busy for your referrals! And I'm never too busy to answer your real estate questions. Oh and by the way, Selling a home in a few hours is no acclamation, it means that the Seller didn't get top dollar! Check out USAHomebids.com if you are even thinking about selling your home.
GOARIZONA REAL ESTATE
Website: Go Arizona Real Estate