Our local real estate market has been cooling down since April of this year. In the spring we had approximately 4,000 active listings on the market to serve the entire Phoenix metro area. In April, prices peaked and the buyer demand slowly started to soften.
By June, we were in a different market. Listings peaked June 28th adding an astonishing 12,246 new listings in the prior 30 days.
The volume of new listings hitting the market felt like the pelting rain we recently experienced. And just as that rain eventually stopped and the water receded, the number of new listings hitting the market are finally beginning to slow down. It won’t be as abrupt as the end of a rain storm, but we will gladly take the reprieve.
In the last few weeks, the volume of listings has “dropped sharply”, according to The Cromford Report. They go on to say that there were “fewer than 10,000 appearing in the last 28 days”. It’s a minor improvement. However, let’s focus on the direction of the improvement.
Queen Creek was recently declared officially a buyer’s market. A buyer’s market has the buyer in the driver’s seat in the market and that often will lead to being in the driver’s seat for the transaction as well. This is great news for buyers!
Buyers had few choices for almost two years. They had to act quickly, offer to buy the home without an inspection, pay much higher than the asking price, and pay the difference between the appraised value and the sale price. Not now.
Buyers have choices. They have a plethora of homes to choose from. They have time to slow down and make their decision.
Buyers have room to negotiate. They do not have the pressure of foregoing the home inspection or repair requests. Nor do they have to supply extra cash to cover the appraisal gap.
Why are so many listings still on the market? That’s part of being in a buyer’s market. There are more listings than there is demand from buyers. Couple that with buyers seeing rate movement and uncertain of when they should lock in a home and their rate.
The Cromford Report shares the good news of buyer activity increasing. “In the 7 days that started on Sunday August 7, we saw 1,803 newly accepted contracts. This is the highest weekly total since June 12 and far more encouraging than the dismal 1,429 for the week beginning July 3.”
Buyers are beginning to feel better about entering the market again. There was a recent dip in interest rates, which may account for the increase in buyer activity. There has been much information about securing a rate buy down as well.
Sellers can pay for an interest rate buydown on the buyers’ behalf. This could be in lieu of a price reduction, assuming the home is at or near the value of the home, at least in the eyes of the buyer.
Sellers have improved the overall showing of the homes by adding staging back into their listing process. A wise seller will heed the advice of their real estate agent and have the home professionally cleaned, including windows. This helps the buyer feel the home has been maintained and cared for.
The last four months have brought so much movement in our market. If you are needing to move, it is still a good time to move. Rates are still low and you have more choices now.
Melanie Nemetz, the owner and founder of The Melanie Nemetz Team with Keller Williams Integrity First can be reached at 480- 221-3034, melanie@fosteringre.com or fosteringre.com.