It’s interesting speaking with the general public about real estate and their perceptions of the current market conditions. More often than not we hear talk of a bubble if things are perceived to be good or of doom and gloom if things are perceived to be bad. The funny thing is, usually it just doesn’t go to either extreme. The real estate market, since it’s crash in 2008-2009 has performed well and is generally quite reliable as a place to see consistent appreciation. For instance, if February’s projected median value of $440,000 in metro Phoenix holds true that will be 6.8% higher than last February. All despite a relatively lackluster year in real estate locally (relatively speaking) and with considerable headwinds from interest rates. Total listings available for sale are only 1000 units higher than last February too. Bottom line: the real estate market in Phoenix metro is chugging along in a nicely balanced marketplace offering opportunities to still purchase as well as a great place for homeowners to increase equity.
FOR SELLERS:
Our advice to Sellers for the better part of two years now has been to stay patient. That may finally be coming to an end. There is an important rate announcement coming in March that, if there is a rate drop as is anticipated, could lead to a movement of buyers back into the marketplace. If you have been considering selling but have held off either because it’s too expensive from a rate perspective to buy, or the time has not been right or you are afraid that you will not get max value, the time may be now to reconsider and start to prepare your home for sale. March-May represents the absolute best time in Phoenix metro to sell!
FOR BUYERS:
The situation for Buyers is complicated. Yes, interest rates impact your buying power and it may be frightening to input a price a down payment and fees into mortgage calculator and have it spit out a monthly payment that looks untenable. However, this is nuanced. Further impacts are made by location. Scottsdale, Carefree & Gilbert are expensive. But other areas are far more affordable. Shifting geography can really assist in bringing down monthly costs. In addition, price range matters. The lower end homes (say under $600K) actually can be a good place to shop currently because this sector is much more interest rate dependent. i.e. these buyers more often than not need a loan and have less to put down. The middle sector ($600K - $1.5M) has been competitive, especially for well-finished homes. We anticipate this sector to have an excellent year. Finally, the luxury market (over $1.5M) has been on a long ascension. Unencumbered by interest rates and fueled by a strong investment market, we are seeing record sales across the board in this sector. It probably will not slow down anytime soon and therefore those buyers on the fence in this price range should act sooner rather than later.
Mark McCloskey
Broker, Avenue3 Realty, LLC