Phoenix and Scottsdale are Nearing a Buyer’s Market!

by MICHAEL BODEEN | Aug 8, 2022 | Bodeen Team Blog, Mike's "Real State" of the Market

The current talk of course, is all about the Phoenix (as well as the country’s) real estate market dropping in value – and it is. See article out today here.

Question? If you’re a renter, should you renew your lease (continue to rent) or opt into the more buyer friendly market happening now?

At some point, you’re going to buy a house, that much you know. You tried this past year and got turned off by the mega-competition offering on homes for sale, so you signed a lease on a home or apartment, because trying to rent a house, was just as competitively bad as buying.

It’s tempting to wait and renew that lease for another year. After all, your wise landlord should be done raising your rates for now, seeing that the rental market is softening as well. And home sales prices continue to trend downward in pricing. On the one hand you would not be faulted to sign a year’s lease and stay where you are, unless of course, the Geico renters upstairs are forever dance clogging LoL:

But things have changed, radically and quickly. (See Numbers Below) Now what should you do as your lease comes up for renewal?

All that said, or danced to, there’s a strong case for house shopping sooner than later. Remember, with over 45 years in the residential real estate market, I’ve been to a few real estate market rodeos. One thing about Phoenix residential real estate, predictable it’s not. There’s no smart money to bet on here.

There are however some things to think about:

• Due to inherently strong Phoenix demand, demand will return
• When demand returns, and it could be soon, competitive bidding returns
• When competitive bidding returns, you’re back to square one.
• With over 100 homes coming on the market each day – You have choices
• Currently, unless a deal comes up that’s a real deal, you may (probably) are the only one ready to make an offer.
• Sellers are much more open to lower than asking prices and terms
• Contingencies, such as selling a home first, are also considered, especially if your home is already under contract.

What would it take to flip the script back to a seller’s market? Not much. For one, an interest rate dropping to 4% would, in my opinion re-open the flood gates. Just as sellers are now bemoaning missing the top of the price market, buyers will likewise become very disappointed for not taking advantage of this window of opportunity now. But will that happen in a few months or a few years, or ever? The Lord knows!

There is however, a really strong case for getting back into the buyer market now: If you actually find the home of your dreams that you can see yourself enjoying for many years to come, and you’re able to secure that home and begin that enjoyment now, what is the value of that?

I’d say that’s something to clog about!

The Dog Days of Real Estate Data for Phoenix and Scottsdale

by MICHAEL BODEEN | Aug 1, 2022 | Bodeen Team Blog, Mike's "Real State" of the Market

The “Dog Days of August” are upon us. With that delightful news, let’s take a look at the Phoenix Metro “Dog Days of Data,” which, if you’re in the Buyer’s camp, the trending good news continues. If you’re in the Seller’s camp, well, compared with one year ago, your home’s value has risen over 10%. This is over twice the annual average appreciation of the last 25 years!

The not-so-great news is that the top of the market has peaked. It’s in the rear-view-mirror. Put that out of your mind. Adios!

When did it peak? Back in May. (The Cromford Report) On May 22nd, the average sales price per square foot (See Chart below) topped out at $306 per square foot (PSF). Last week according the to the chart, we were at $290 PSF – a 5% drop in two months. Actually, the market peaked 30 days before that (mid-April), due to typical 30 day closing lag time.

Now there’s a caveat to what I just expressed. You’ve heard us say for years, that ‘all real estate is local.’ The data we generally use is the ‘Phoenix Metro’ single family residential real estate market. Every zip code is different. Every community within a zip code is different. And finally, every residence within a community is different.

Interestingly, some higher end markets are currently the slowest to be dropping, including Paradise Valley, Fountain Hills and Cave Creek. Along with those cities, Scottsdale, Avondale, Goodyear, and Mesa are still technically in a Seller’s Market, but are heading towards balance shortly. Currently in balance are Phoenix, Glendale, Peoria, Chandler, Surprise, Tempe, and Gilbert. Most of these in balance will be in a buyer’s market next week at the current rate of price drops. This is how quickly the market is adjusting.

Communities that are now in a firm Buyer’s Market are Buckeye, Queen Creek and the town of Maricopa.

So, to end with a positive spin, buyers, your time to get back into the market is soon, if not now. Let’s get you set up with a daily automated list of homes to view online – available supply of homes are increasing daily. Mortgage rates have actually dropped as well. We’ve also seen a large drop for the price of gas at the pump, which may mean lower inflation, which could mean even lower rates ahead.