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Casey Taylor

2014 – Second Half Outlook

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Affordability!!! According to CNBC, based on a weaker than expected first half, the second half of the year is going to be driven by housing Affordability. With many new apartment complexes coming on online this year, renters and buyers have more choices. While mortgage interest rates are still very low, pricing could squeeze out some first time homebuyers should rates start to tick up. So the key to selling more homes will be based on buyer affordability.

With popular reality real estate shows all over TV these days, many consumers are buying homes that they can afford and then start DIY projects once they close. Buyers are realizing the value of their dollars go further when they improve the home themselves. That said, many homebuyers still opt to buy that “move in ready” home that doesn’t need a bunch of renovations like paint, carpet, flooring, and updating the kitchens and bathrooms. For those who have tried DIY projects at home, they are not always that easy and can be time consuming and frustrating without the proper skills and tools to complete the job correctly.

Let’s see how things unfold as we move through the rest of the year!

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AZ housing Market Update – June 2014

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20131017150807159164000000-o[1]Getting back to basic economics, supply and demand continues to drive the housing market.  According to the ARMLS June update, the supply and demand for AZ housing continues to be unbalanced and slightly favors buyers.  YTD homes sales are down for the first half of the year, more inventory is Active on the market (current monthly supply of almost 4 months) and with many distressed sales (and investors buying distressed homes), the market changes quickly.

Many sellers are starting to wonder why their home is not selling as fast as they anticipated.  The Avg. days on market is up to 83 while sitting just under 66 a year ago.  So what gives?  Well, for starters, home prices are up significantly higher then last year (up almost 10% year over year median).  Interest Rates, while still very attractive, have moved up just slightly.  So with the combination of higher prices, less buyers and moving interest rates;  this equals fewer sales and longer time on market for actively listed homes.

That said, there still spells opportunity for both buyers and sellers alike.  Many “Boomerang Buyers” (those that have been previous homeowners that were displaced due to short sales or foreclosure) are now re-entering the market.  They have sat out of the market for the past few years and many are now eligible for financing under conventional and government loan programs.  So buyers have many choices in today’s market, while sellers are getting a fresh pool of buyers to assist them with the sale of their home.

All in all – a great time to sell or buy in Arizona!

 

 

Foreclosure Market Trends Update

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Here is the latest update from RealtyTrac.

http://www.realtytrac.com/MarketTrends/NewsLetter.aspx?guid=50c3c739-0fcf-423b-9673-9f781d8c2c40

 

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Phoenix Housing Market on the rise

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Phoenix housing prices have seen a substantial increase in the past 12 months with as much as 20-40% growth rates in certain parts of the city.  With limited inventory available for many new home buyers, many builders have seen an increase in sales.  As investors flocked to the Valley over the past 2 year, with housing prices at historic lows, many of the distressed properties for sale have been either scooped up as rentals or resold as “Fix and Flips”.  Investors often times going in and doing a nice re-model of the home in order to improve the property and sell to an end user.

The Phoenix housing market has a number of factors influencing home sales:

  • Price Increases
  • Consumer Demand
  • Historically Low Mortgage Rates
  • The overall improvement in the economy and job growth

First-time home buyers feel the pressure.

Many first time home buyers and buyers with a price-point under $200,000 are often getting outbid to “Cash” investors.  Many offers that are made by these cash investors are often made sight unseen.  That is because the market has been climbing so quickly that investors could buy a home, hold it and renovate it for a month or two and re-sell the house for a nice profit.  This often leaves owner occupant buyer’s left in the dust, and wondering why they didn’t get the home.  This has lead to buyer’s making “above list price” offers and hoping that they have a chance to get the home.

This activity has fueled the market in a challenging way.  Primarily it causes bidding wars that often leads to people feeling like they are paying too much for a home or even discouraged to the point that they don’t want to bother trying to purchase a home all together.  Another big challenge lends to the circumstances of an appraisal for anyone buying and obtaining mortgage financing.  Often appraisers are now forced to try and justify the higher price on accepted contracts, even though many similar comparable homes that have recently sold, have sold for less.

Opportunity still exists

Despite the rampant price increases, buyers should not be discouraged.  Many investors are realizing that the market can no longer support the quick gains as seen in the past 12-24 months and many are no longer buying.  That will leave plenty of opportunity for first-time buyers and move up buyers to find nice homes that they can purchase and enjoy.  After all- buying a home and getting a 30 year rate in the range of 3.25-3.75% will not be around forever!

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