August 2019 Market Bulletin
A snapshot of the August 2019 Arizona real estate market, including inventory trends, buyer activity, pricing updates, and key insights to help homeowners, buyers, and sellers make informed decisions.
Phoenix is HOT!!!! Everyone is talking about it and it’s not just the weather. What is really happening in the Phoenix Real Estate Market and why is hot the buzzword surrounding it?
Here is the scoop in language you understand:
Listings are down 15% from last year, contracts are up 15% from last year, and sold listings is up 7% from last year. 84% of sales have been normal sales with 10% listed as flips and 6% listed as other. Median price per square foot is hovering just over $160/square foot.
So yes, that’s a lot of numbers, but what does that mean? Let’s use the graph below to help explain. If you are shopping under $500,000 you will probably find that you are having a tough time finding the perfect home. You will also probably notice that there are multiple offers on the properties that are in great condition and have great locations that are close to local amenities. As your price point goes closer to under $300,000 you have probably notice that its’ even harder to find what you want and by the time you do it’s already gone. So why is that?
The mortgage rates have taken another drop which is the lowest we have seen since in 3 years. Since the rates have dropped, we have buyers who can afford more of the house than they could before, which increases demand. A buyer who was paying $1200 a month and living comfortably may now find with the rate drops that they can afford a home that may be priced a little higher and yet keep their $1200 a month payment. So Sally Seller lists her house and it’s priced great, is move in ready and boom it’s sold before she can blink. Now this puts Sally Seller in a bind because she didn’t think the demand was as hot as the news was saying and she doesn’t have anywhere to move yet. She starts looking and gets quickly discouraged because the market has less than 1 month of inventory** and no one will accept a contingency (and why would they when they probably have 5 other offers and 2 of them are cash). Now you can see why this current market is creating a pickle for some of the sellers. So instead of selling and going through the turbulence, they are refinancing. Now lenders who are used to 5% of the applications being a refinance are seeing nearly 20%.
So what does Sally Seller do? What would we advise. Well it depends on your needs and ultimate goals. It isn’t impossible to navigate this market, we just have to use finesse and you can’t trust your home purchase and sale to any agent, in this market you need integrity, experience, and an agent willing to communicate X10.
Sally Sellers Options (A few to start with, but there are many more beyond this)
- Get your house ready for market, sign the listing agreement, and get pre-approved with your lender. We can market the listing off MLS while you are searching and likely will get a buyer through our network before you even go “live.” Benefit: You have time to look without being stressed.
- Sign listing agreement, get it ready to list and go active on the market. When the house is sold, extend the closing to a 45-60 day closing so that you have time to find the right property. (there are also options to negotiate in for post-possession agreement).
- Have us help you sell to an investor so you can cash out and walk away with cash ready to purchase your next home. With an extended network, we are able to help you make the right decision so that you don’t leave too much on the table.
Call us to schedule a consult to discuss your goals so we can help you find the right strategy to make your home goals happen.
Stay cool,
Linds
**Months of inventory broken down: Months of Inventory is a measure of how fast all the existing homes on the market would last assuming a) no more listings are added, and b) the rate at which homes sell is a constant figure based on the average of the last 12 months of sales.
So basically we would run out of inventory in less than a month. So Sally Seller who is trying to find a new home and wants to sell because her home is too far from work, is now struggling to find something she likes in the area she needs. So what can Sally Seller do? Sally Seller calls Vista because she knows that we will help her solve the riddle and make her dream happen!
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