AUGUST 2023 - MARKET UPDATE

Every two months we sit down to write a market update to give our clients some additional value beyond just highlighting our listings for sale or recent closings. For the past four months, this market update has felt like more of the same each time.  If you have read the past few, August will likely sound like previous iterations.  At this point in the marketplace, it feels as if we have landed at a stalemate.  Interest rates refuse to budge and would-be Sellers are sitting on the sidelines waiting for a decrease in rates so that they can buy something new.  Would-be Buyers are also on the sidelines, for the same reason.  Some of them have re-upped leases and others have turned their back on the market until there is a change.  Despite the stalemate, the market is still a Seller’s market, albeit a soft one.

For Buyers:

We are generally seeing two types of Buyers active in the market these days.  One, is the well-capitalized Buyer who can afford today’s interest rates and likely plans to refinance.  They are putting solid percentages down on properties and financing as little as possible. The other, is cash, and in Phoenix, there is an unbelievable amount of liquidity.  These buyers are taking advantage of a softer market than we have seen in years, despite it still being termed a “Seller’s market”. Seller concessions continue to be prevalent too, so Buyers that do need extra assistance with rate buydowns or closing costs can find it as needed.  We continue to anticipate a decrease in interest rates sometime in the last quarter, but the experts are unsure of the timeline.  When that happens, expect a buyer frenzy locally.

For Sellers:

Low inventories continue to dominate the landscape. Because of this, Sellers still have a leg up.  If they are in a place to sell, i.e. they can afford to buy again, rent or they plan to move out of state, then the time is still right to sell.  Economic indicators in Phoenix Metro are still very strong so there is no reason to believe that we will see any correction or negative change in the market from a Seller’s perspective.  We have been advocating patience if you plan to sell.  We still firmly believe that this fall will be a very good time to sell… hot summer months are past, school is back & so are most of the people who escaped the heat.  This is particularly true for the luxury marketplace which is far less susceptible to elevated interest rates.  At the same time, if maximizing value is important to you and you are not in hurry to sell, we always recommend marketing your home February-May.

Mark McCloskey

Broker, Avenue3 Realty, LLC