AUGUST 2024 - MARKET UPDATE

MARKET UPDATE

Once again, interest rates are front and center as it relates to the general marketplace.  For most of this year interest rates have hovered in the high 6 percentiles.  Too high to influence most would-be buyers to make a move to buy.  The past few weeks has seen positive movement, with the current 30-year fixed rate at 6.44%, far lower than earlier this year.  The good news culminated in an announcement by Fed Chair Jerome Powell this past week in Jackson Hole, WY.  He intimated that interest rates are due another cut in late September of .25% or even a full half point! 

For months we have been speculating that a rate adjustment below 6% could result in positive sweeping changes in our marketplace.  We are already feeling the effects on the ground.   Showing activity has increased, offers are coming quicker on our listings and more buyers have reached out to express renewed interest in purchasing.  Our feeling is that there is massive pent-up Buyer demand and that there is a fair amount of Seller interest in moving on from their current properties once they can swallow rates on a new purchase. Additionally, moving past the Presidential elections in early November should release another subset of buyers and sellers that have been waiting for more certainty in the political landscape.

For Buyers:

The window for buying at reduced prices and with Seller concessions may be closing rapidly because of the interest rate changes noted above.  New home sales have been relatively robust in comparison to the general marketplace because builders have been buying down rates for Buyers utilizing their preferred lenders.  But most new home communities are located on the outskirts of Phoenix metro.  This desire for new homes may flip in the coming months as traditional sales should pick up and Buyers are no longer willing to drive for better rates.

For Sellers:

Those Sellers who have exercised patience over the preceding year-plus are at an inflection point where it makes sense to start considering a sale in the coming months.  The current market makes it difficult to command prices in line with homes that sold in 2021/2022 and many Sellers still believe that the value of their homes falls in line with that timeframe.  However, this thinking may be on par soon, as it feels likely that a frenzy of buyer activity is (finally) headed our way.

Mark McCloskey

Broker, Avenue3 Realty, LLC