Arizona’s housing market remains Hot Seller’s Market, however, there are certain times it is NOT a good time to sell
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Arizona is a HOT Seller’s market, and there is no indication this will change during 2020. With a population of 4.9 million in the Phoenix Valley, this vibrant metropolitan is now the top destination for relocations.
Phoenix, Scottsdale and the surrounding Valley of the Sun provides low property taxes, low cost of living, little threat of natural disasters, fires, mudslides, hurricanes or tornados. Add to that warm weather, sunshine 350 days a year, little to no humidity, hiking, Spring Training, top professional sports teams, great Universities, and a full calendar of Performing Arts. Hiking trails and mountain peaks are within and surrounding the Valley neighborhoods, while nearby motor sporting lakes, the Tonto National Forrest, some of the best golf courses in the nation and one of the largest equestrian meccas have created an easily accessible active live-work-play lifestyle rare to find.
The Valley has been in an upward trajectory for over 15 years. And homeowners now receive solicitations daily from people looking to cash in. However, there are times that selling is not recommended. Be wise with one of your largest investments: Use a tenured professional who has experienced one or more of Arizona’s market corrections.
Below is this month’s Cromford Report commentary from the campus of Arizona State University.
The urgency for buyers cannot be stressed enough; real estate prices are not projected to decline in the Greater Phoenix area in 2020. There is not one measure from any angle that supports that theory. Not only will they not decline, they will not stop rising this year at the current levels of supply and demand.
On January 9th, active supply was counted at just over 12,000 listings for all of Greater Phoenix. This is down 32% from this time last year and excruciatingly low. To put it in perspective, a “normal” level of inventory should be at least 28,000 – 30,000 active listings in the MLS for a metropolis the size of Maricopa and Pinal County. The last time inventory was recorded this low was in 2005 at 9,000 listings with a population of 3.8M. Now Greater Phoenix has 4.8M people with less than 1% of existing housing available for sale. With monthly sales up 17% over last year, fueled by population growth, job growth, income growth and low interest rates in the area, sellers have few reasons to sell below market value. It’s not logical to expect prices to soften in this environment.
Buyers who have been waiting for sales prices to decline before they purchase have nearly missed the boat. This is because while they were watching prices rise, the payments for those same homes declined for a year with declining mortgage rates. However, when mortgage rates stabilized 6 months ago, hovering around an average of 3.75%, payments started to creep up again.
In short, if someone wants to purchase a home and they have the means, then they should lock into one. They should expect competing offers, expect to lose some opportunities, and expect to do some upgrades. They should also expect to live in their new home for at least 5 years to build up enough equity to mitigate the risk of ups and downs in the future.
This is an exciting time for those who need to sell. Anyone who owns property has probably been contacted multiple times by multiple means throughout the year by people wanting to buy their home. While sellers are under much less pressure to perform repairs and upgrades in order to sell their home, it doesn’t mean that they will sell it as quickly or for as much as those that are move-in ready. But, it will sell in this market. Those who are considering selling to an internet investor buyer (aka iBuyers who offer some up-front certainty and convenience in the selling process), should know that they still have negotiating power in the transaction and have the option to be represented by a Realtor if they choose.
Provided as a proud subscriber of the Cromford Report. Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2020 Cromford Associates LLC and Tamboer Consulting LLC. About the Blogger Denise van den Bossche has been a licensed Agent and homeowner for over 35 years in the Metro Phoenix Valley. To CONTACT Denise, please call 602.980.0737 or EMAIL: Denise@AZMultipleListingService.com. Her husband Patrick is President of Realty Executives International, so if you need help buying or selling homes anywhere in the U.S. or Canada, please call, email or text!
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