Are you curious to know what is going on with the Arizona real estate market these days? Keep reading as I'm giving you the low down plus at the end I'm sharing some ideas on how to make this market more favorable for buyers!
Hi guys I'm Alejandra Paladino your local Arizona real estate agent. If this is your first time to my blog and you want to know everything about moving to Arizona & living in Arizona make sure you subscribe so you’re notified every time I post a new blog.
My team and I are getting so many people calling who are relocating here and we absolutely love it! If you are thinking about moving here make sure you give us a call we would love to help you!
As we all know interest rates have gone up a lot recently. It happened so quickly that it pulled the emergency break on the real estate market. It started feeling like chaos as the real estate market we got used to got turned upside down.
The Arizona real estate market was moving so quickly it was not sustainable. I remember having to sometimes write offers on houses and having them ready prior to us viewing the house. Or crafting creative offers so my clients would get their dream house when we were competing against 30+ offers. Plus, buyers were agreeing to all kinds of crazy things like letting the home owner stay in the house for free for a certain period of time. Those days are over! Unless you come across a unicorn house that is priced correctly I'm now not seeing these crazy bidding wars and crazy offers. So that is great news for buyers!
BUT The higher interest rates have pushed many buyers to put a pause on their home buying. This has led to a noticeable decrease in demand and houses are now starting to sit longer on the market.
Home owners that were on the sidelines thinking about selling have rushed to get their houses listed for sale. Unfortunately many think the market is crashing and want to sell before houses drop in price. All the experts are saying it's not a market crash just a shift and a softening.
As of Wednesday, there are around 12,000 homes available in the Valley.
Compare that to late May or early June when housing inventory in our area was just over 4,000.
For those that keep thinking there's a housing bubble that is about to pop.
If you look at what is going on in our marketplace, the fundamentals are very different than back in 2008 and 2009. Back then, there was false demand in the market based on mortgage-backed securities.
Luckily financial regulations are in place now, the Dodd–Frank Wall Street Reform and Consumer Protection Act [read more about it here]. So that type of activity no longer exists.
What happened then was caused by cheap debt, shady lending practices, and financial acrobatics that ended with too many borrowers in mortgages they couldn’t afford.
People have equity in their homes and values have gone up. Most of the larger lenders are doing loan modifications so owners can stay in their properties. Even if lenders are saying, ‘No, you have to pay it off now,’ homeowners have so much equity that they can sell and pay it off and walk away with money!
That’s why it’s not going to be 2008 all over again. You will have some situations where people are upside down, but that’s going to be the exception, not the norm.”
Step back from 2008, and you see that home prices have appreciated in 4 of the last 6 recessions. They only fell twice—slightly in the early 90s (1.9%) and almost 20% in 2008.
The great news for buyers is houses are now sitting on the market longer instead of selling within a few days.
This is allowing buyers to take their time and make sure that they’re getting the right house as opposed to having to rush and quickly make an offer on a house without sometimes even being sure about.
Since houses are not selling so fast I've noticed sellers are more open to giving incentives to buyers to help their houses sell. My team and I have started negotiating for sellers to pay concessions and then we use those concessions to buy down the interest rate! So instead of the higher rate you see in the market we can get it down around .5% or more!
For instance we get a seller credit that's enough to reduce rate down by .500%
Example $400,000
Conventional
If rate is 5.500%
Go down to 5.000%
Using the example of a $400k house and a conventional loan. And if the rate is 5.5% we can have it go down to 5% that's a savings of $111/month
This is something customized my team and I would strategize with you on.
If you want to chat more about that or anything else be sure to reach out we would love to connect with you and help you out!
And if you haven't subscribed yet make sure you do so that you can stay connected and be informed! And if there's anything else you want to know about just comment below or contact us directly!
Thanks for hanging out today. I'll see you on the next one!
