(Source: ArizonaReport): Sue Weaver
Homebuyers across the nation feel as though they are trying to jump into a speeding car moving 60 mph down the highway. Nationally, the inventory of homes is falling, dropping 8.9 % in the second quarter of 2017 thereby racking up a nine-quarter trend. In fact, the national inventory of homes is down 20 percent since 2012 resulting in extremely competitive markets in many metros. The Phoenix-Mesa-Scottsdale metro is a prime example of how low inventories are placing upward pressure on prices.
Phoenix Predicted to be a Hot Market for 2017
Prognosticators foretold that Phoenix would be a hot market moving into 2017, with predictions being the hottest market or at least landing in the top ten. The data behind these predictions are the metros’ past performance and lack of inventory.
In its December 2016 report, the Home Buying Institute notes that Phoenix home prices spiked nine to 11 percent, depending upon the source, from December 2015 to December 2016. This beat the national average of six percent. The HBI report also indicated there was not enough supply to meet demand, at that time. This was due to increasing pressure from Baby-Boomers retiring and moving into the area.
Phoenix’s Spring Market is Moving Fast
Annually, real estate website Trulia looks at the Spring Market in their Fastest Moving Markets report. According to their latest installment, the Phoenix isn’t the fastest moving market in the nation. However, the amount of inventory moving off the market in 60 days is significant. Only 39.5 percent of Phoenix’s home inventory stays on the market for more than two months.
|Fastest Moving Markets – Spring 2017|
|US Metro||% of Homes Still on the Market After 2 Months|
|San Jose-Sunnyvale-Santa Clara, CA||20.00%|
|San Francisco-Redwood City, CA||23.70%|
|Salt Lake City, UT||26.00%|
|San Diego-Carlsbad, CA||28.20%|
|Colorado Springs, CO||31.60%|
Buying in Late 2017
Buyers eyeing a downtown Phoenix Condo or a home in Scottsdale should expect stiff competition and higher prices. The Phoenix housing inventory, as of June 30, is still falling short of demand. Even with increases in new construction, demand will outpace supply, as reported in the HBI June market update. The metros’ housing prices are increasing at close to 10 percent, year over year. Moreover, interest rates are increasing. On June 13, 2017, the Federal Reserve raised interest rates 0.25 percent and plan one or two more increases before the end of this year.
Being nimble and informed is the key to success in the 2017 Phoenix market. Buyers should consult with a Realtor and get pre-qualified for a mortgage. Continue to stay abreast of mortgage rates plus how much of a home is affordable. Tools such as this mortgage rate calculator are helpful. Be strategic about available listings making sure to get alerts from your agent. If making an offer be flexible about closing dates. Finally, keep an open-mind about the homes. Don’t let the perfect be the enemy of the good. Transforming a reasonably priced home with good bones into the home of your dreams may be the better option in a competitive market.