Are There More Homes for Sale Where You Live?

One of the biggest bright spots in today’s housing market is how much the supply of homes for sale has grown since the beginning of this year.  Recent data from Realtor.com shows that nationally, there are 36.6% more homes actively for sale now compared to the same time last year. That’s a significant improvement. It gives you far more options for your move than you would’ve had just a year ago. And with supply improving, you’re also regaining a bit of negotiation power. So, if you’re someone who thought about buying a home over the last few years but was discouraged by how limited inventory was, this should be welcome news. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:  “Increased housing supply spells good news for consumers who want to see more properties before making purchasing decisions.” But just so you have perspective, even though inventory has grown, that doesn’t mean we’ve suddenly flipped to an oversupply of homes on the market. There are nowhere near enough homes for sale to make prices crash. If you compare today’s inventory levels to more normal, pre-pandemic numbers (2017–2019), there are still roughly 29% fewer homes actively for sale now (see graph below): So, while we’re up by almost 37% year-over-year, we’re still not back to how much inventory there’d be in a normal market.  As Bill McBride, Housing Analyst for Calculated Risk, explains:  “ . . . currently inventory is increasing year-over-year but is still well below pre-pandemic levels.” But that’s okay. It’s to be expected. As a country, it’ll take a while to get back to the typical level of homes for sale. And the good news for buyers is, in some select markets, it’s closer to being a reality. Here’s a rundown of what today’s inventory growth looks like by region (see graph below): Real estate will always be hyper-local. If you want to find out what inventory numbers look like where you live, reach out to a local agent. They’ll be able to tell you what they’re seeing and how it stacks up to the national market. You may find you have even more opportunity to move where you are. Bottom Line The supply of homes across the country is improving in a big way. As a buyer, that gives you more options for your home search, and ultimately, a better chance of finding what you like. So, what are you looking for in a home? And what’s your budget? Let’s go over that together to find the options that may be right for you.

August Market Update

It's no secret that the high-end market typically experiences a significant slowdown during the summer months, leading to noticeable fluctuations in market averages, particularly concerning pricing. To better understand this trend, let's compare data from April and July, focusing on the Northeast Valley versus the rest of the Greater Phoenix area. The Northeast Valley, home to the majority of luxury properties, includes Carefree, Cave Creek, Fort McDowell, Fountain Hills, Paradise Valley, Rio Verde, and Scottsdale. We've also included Phoenix (85016 and 85018) and excluded Scottsdale 85257 for this analysis. Northeast Valley: April Sales: 662 single-family homes July Sales: 440 single-family homes Decline in sales volume: 34% Average price per square foot: Decreased from $558.56 to $505.70, a 9.5% drop. Rest of Greater Phoenix: April Sales: 4,631 single-family homes July Sales: 4,267 single-family homes Decline in sales volume: 8% Average price per square foot: Decreased from $262.36 to $254.26, a 3% drop. When considering Greater Phoenix as a whole, the weakened performance of luxury home sales has significantly impacted the average price per square foot, reducing it from $313.17 in April to $289.28 in July, a 7.6% drop—over twice the decline seen outside the Northeast Valley. However, as temperatures begin to cool, we anticipate a rebound in high-end sales, which should help stabilize average pricing. The table is showing a slight improvement compared to the previous week. Now, 8 cities have seen an increase in their Cromford® Market Index over the past month, up from 7 last week. Meanwhile, 9 cities have experienced a decline. The changes remain slow, making it a frustrating time for market watchers. The average CMI change over the past month is -0.1%, a significant improvement from last week’s -1.8%. This trend, which began four weeks ago, suggests the market is on the verge of becoming more favorable for sellers. Cities such as Fountain Hills, Cave Creek, Buckeye, and Paradise Valley are seeing the largest percentage gains. Scottsdale, Maricopa, Goodyear, and Peoria have also seen modest increases. The largest declines continue to be concentrated in the Southeast Valley, particularly in Tempe, Chandler, and Mesa. Out of the 17 cities, 9 remain in a seller's market (with a CMI over 110), 3 are balanced, and 5 are buyer's markets. Three cities have a CMI over 140, while three have dropped below 75. While the market isn't worsening, we're still waiting for a significant change to ignite more activity.

Where Will You Go After You Sell?

If you’re planning to sell your house and move, you probably know there’s been a shortage of options available. But here’s the good news: the supply of homes for sale has grown in a lot of markets this year – and that’s not just existing, or previously-owned, homes. It’s true for newly built homes too.  So how do you decide which route to go? Do you buy an existing home or a brand-new one? The choice is yours – you just need to figure out what’s most important to you. Perks of a Newly Built Home Here are some benefits of buying a newly built home right now: Have brand new everything with never-been-used appliances and materials Use energy efficient options to save money and leave a smaller footprint Minimize the need for repairs and benefit from builder warranties Take advantage of builder concessions that can help with affordability In today’s market, a lot of builders are focusing on selling their current inventory before they add more homes to their mix. And some of them are offering concessions and are more willing to negotiate to make a sale happen.  That, coupled with the fact builders are primarily building smaller, more affordable homes, has led to one other potential perk. The median price for a newly built home in today’s market is actually lower than the median price of an existing home – which isn’t usually the case. Ralph McLaughlin, Senior Economist at Realtor.com, shares:  “Homebuyers who are looking for that ‘new-home smell’ may be in a relatively friendlier market than times past when new homes were considerably more expensive than used ones.”  If you’re interested in seeing what builders nearby have to offer, lean on your real estate agent. Their knowledge of local builders, new communities, and builder contracts will be important in this process. Perks of an Existing Home Now, let’s compare that to the benefits of buying an existing home.  Join an established neighborhood that you can get a feel for before moving in Choose from a wider variety of floorplans and styles Appreciate the lived-in charm that only an older home can provide Enjoy the privacy and curb appeal of mature trees and landscaping In addition to these lifestyle benefits, there’s strategic value to buying an existing home, too. Remember, you can always make upgrades to an existing home down the road to give it some of the latest features available. This gives you the best of both worlds: you’ll get the charm, the neighborhood, and over time, you can still add those on-trend elements you may see in a brand-new home. And if you do, you’ll likely increase the home’s value too. An article from LendingTree explains: “. . . they can personalize it and possibly increase its potential resale value with cosmetic upgrades . . . Plus, if a home comes with physical details or stories that add charm, in some cases, these elements are attractive enough to add to a home’s resale value . . .” Want to see what’s available? Your real estate agent can show you what homes are for sale in your area, so you can see if there’s one that works for you and your needs. Bottom Line There are a lot of factors that go into deciding whether to buy an existing home or a newly built one after you sell, but it’s essential in today’s market to understand the opportunities you can find in both. Let’s connect so you have expert guidance as you explore the options in our area.

Mortgage Rates Down a Full Percent from Recent High

Mortgage rates have been one of the hottest topics in the housing market lately because of their impact on affordability. And if you’re someone who’s looking to make a move, you’ve probably been waiting eagerly for rates to come down for that very reason. Well, if the past few weeks are any indication, you may be getting your wish. Mortgage Rates Trend Down in Recent Weeks There’s big news for mortgage rates. After the latest reports on the economy, inflation, the unemployment rate, and the Federal Reserve’s recent comments, mortgage rates started dropping a bit. And according to Freddie Mac, they’re now at a level we haven’t seen since February. To help show the downward trend, check out the graph below: Maybe you’re seeing this and wondering if you should ride the wave and see how low they’ll go. If that’s the case, here’s some important perspective. Remember, the record-low rates from the pandemic are a thing of the past. If you’re holding out hope to see a 3% mortgage rate again, you’re waiting for something experts agree won’t happen. As Greg McBride, Chief Financial Analyst at Bankrate, says:  “The hopes for lower interest rates need the reality check that 'lower' doesn't mean we're going back to 3% mortgage rates. . . the best we may be able to hope for over the next year is 5.5 to 6%.” And with the decrease in recent weeks, you’ve got a big opportunity in front of you right now. It may be enough for you to want to jump back in.  The Relationship Between Rates and Demand  If you wait for mortgage rates to drop further, you might find yourself dealing with more competition as other buyers re-ignite their home searches too. In the housing market, there’s generally a relationship between mortgage rates and buyer demand. Typically, the higher rates are, the lower buyer demand is. But when rates start to come down, things change. Buyers who were on the fence over higher rates will resume their searches. Here’s what that means for you. As a recent article from Bankrate says: “If you’re ready to buy, now might be the time to strike. Home prices have been rising primarily because of a longstanding shortage of homes for sale. That’s unlikely to change, and if mortgage rates do fall below 6%, it’s possible buyers would enter the market en masse, further pushing up prices and resurrecting bidding wars.” Bottom Line If you’ve been waiting to make your move, the recent downward trend in mortgage rates may be enough to get you off the sidelines. Rates have hit their lowest point in months, and that gives you the opportunity to jump back in before all the other buyers do too. If you’re ready and able to start the process, reach out and let’s get started.