Housing Market Updates September 5, 2023

Sept. Housing Market Update

Residential real estate across the metropolitan Phoenix market was seasonally low in August, as expected. Luxury activity is particularly low during the summer months. It is currently a seller’s market across the valley except for Queen Creek, Maricopa and Casa Grande, which are balanced.

Inventory is Stabilizing, Still Very Low

We’ve seen a continuous decline in the number of homes for sale since last October, though the trend has slowed in recent weeks. Supply is 51% below normal for this time of year. The ratio between supply and demand is resulting in a seller’s market, though it is mild compared to the frenzy we saw eighteen months ago. Given that most homeowners with mortgages have extremely low interest rates, low inventory is likely to continue for some time. Those that do sell are capitalizing on favorable conditions.

Is There Ever a Bad Time to Buy?

Mortgage rates are keeping some buyers on the sidelines with demand 24% below normal for this time of year. However, finding the right home can be challenging in this market and buyers have less competition for homes right now so it may very well be the right time to buy. There are indications of pent-up demand that will eventually break free, which could bring us right back to multiple offers and sales above asking price. Additionally, here are some of the ways lenders are helping buyers get into the home they want now:

  • Get a lower interest rate NOW – seller concessions can be used to buy down your mortgage rate for the first 2-3 years. This temporary rate buydown reduces your mortgage payment until rates hopefully come down and you refinance. As an example, if the mortgage rate you qualify for is 7%, a 2-1 buydown means it’s 5% for the first year (2 full points lower), 6% the second year (1 point lower), and then it goes to the full 7% after that.
  • Refinance at no cost – most lenders are offering buyers the opportunity to refinance with no lender or appraisal fees after six on-time payments up to three years from their closing date.

Rental Inventory Rising, Rates Stabilized

The supply of long-term rental properties (excluding vacation rentals) continues to rise, which has led to a stabilization of rental rates. This increased inventory may be coming from short-term rentals since our market is oversaturated in that area. Eventually, investors may decide to sell these short or long-term rental properties, which could help ease the lack of inventory of homes for sale.

Questions or More Info?

If you have questions or would like more information on a specific part of the valley, please don’t hesitate to reach out to me at 312-608-9041 or paula.rosentreter@azmoves.com

Source: The Cromford® Report