TRENDING REAL ESTATE NEWS_________________
Arizona Housing Market Prices and Forecast for 2024
One of the most pressing questions in the real estate market is whether home prices in Arizona will go down in 2024. The data and forecasts show that while there might be minor fluctuations, the overall trend appears to be positive. With an expected increase in home values in major cities like Phoenix and Tucson, it suggests a stable and potentially appreciating housing market.
Hence, the Arizona housing market has its ups and downs, but it remains strong and attractive to both buyers and sellers. Keeping an eye on the latest data and forecasts is crucial for making informed real estate decisions in this dynamic market.
Average Home Value in Arizona:
According to Zillow, the average Arizona home value stands at $421,939, experiencing a notable 0.9% increase over the past year. This indicator provides a snapshot of the overall health and stability of the housing market.
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The 15 Hottest Real Estate Markets in the U.S.
After more than two years of stiff competition and fast-rising prices, the U.S. residential housing market experienced a rapid cooldown throughout the latter half of 2022 and the early months of 2023.
Despite recent signs that market conditions could be heating up again, 2023 marked a notably more subdued year for U.S. real estate compared to the preceding years.
One of the most obvious signs of changing market conditions is home price growth. Similar to home prices, the trajectory of home sales has been a roller coaster in recent years.
Although the national real estate market is showing moderate signs of heating up, some geographies are seeing more activity than others.
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MARKET UPDATE_______________________
Why Homeownership is a Hedge Against Inflation
Sellers Compete on Condition as Builders Ramp Up New Permits
For Buyers:
Inflation is a hot topic today. Talk to any investor about hedging inflation and they may bring up strategies that include gold, commodities, rentals, or even cryptocurrency. For young adults, however, the first step towards hedging inflation is typically moving out of a rental and into homeownership. Let’s discuss why.
The Consumer Price Index (CPI) is arguably the most quoted inflation measure in mainstream media. Most readers assume the main driving forces of the CPI are food and energy. They make up 20% of the weight, so that’s a fair assumption. However, it’s shelter costs that are weighted the heaviest of all the categories at 36%, specifically the cost to rent. Nowhere in the CPI does the cost to purchase a home come into the equation because there is no rent to pay if it’s purchased with cash, or the cost is fixed for 30yrs if there’s a mortgage.
So while the Consumer Price Index has increased 12% since June 2022, once shelter is removed the increase is only 2.1%. One could argue that this is the 2-year inflation rate for those who own their primary residence versus rent, which accounts for roughly 64% of all households in Maricopa County.
For Sellers:
It’s the peak Spring buying season in Greater Phoenix, although it may not feel like it for some sellers. The housing market has begun to drift towards another balanced state over the past 4 weeks, which is the result of an accumulation of supply as demand remains weak. Listings under contract are only down 6% compared to last year, but active listings are up 26%. Days prior to an accepted contract would be 3 weeks at this time of year normally, but current conditions are adding an extra week for sellers.
Word on the street is resale homes needing to be remodeled or updated are sitting a bit longer as builders are ramping up permits for new homes. In fact, single family permit activity is up 125% year over year for January and February and-new home sales are up 16%, surpassing 2021 (the previous 10-year high mark). The competition isn’t just for the sub $500K market either. Luxury new home sales over $3M are up 79% so far this year and up 28% between $1M-$3M.
Financing Remodeling Projects an Issue
The struggle for resale listings that need paint, carpet, or significant changes is that fewer traditional buyers have the capacity to finance a remodeling project with current rates, or they may not be able to visualize the space any other way, or they may think the cost and time for basic renovations is greater than it is. As far as investor purchases go, wholesale offers are due to get uglier with increased holding costs, stagnating monthly appreciation, and smaller returns. Flip sales are down 74% from 2 years ago and at a level comparable to 2015.
Whether it’s getting quotes for work, renditions to help with visualization, or advising the seller on the most important updates to make prior to listing, it’s markets like this where professional representation and feedback makes a difference for both sellers and buyers. Despite current challenges, sellers are averaging 97.8% of their last list price at close of escrow so far this month. Seller-paid closing-cost assistance is down 2% to 44% of sales, and the median sales price increased to $444,900, up 6% from last year.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC
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FOR THE HOME_______________________
Deed Fraud Is On the Rise—Here’s How To Protect Your Home
A pernicious form of real estate fraud appears to be on the rise, with consequences that can be devastating for homeowners.
Known as deed fraud or home title theft, the scheme involves forging documents to record a phony transfer of property ownership. Criminals can then sell the home, take out a mortgage on it, or even rent it out to tenants to turn a profit.
Last month, a community organizer in Detroit, MI, was charged in a particularly egregious case. Federal prosecutors say Zina Thomas, 60, stole more than 30 homes in and around the city by forging quitclaim deeds transferring the properties to fictitious entities, and then selling them to unwitting third parties.
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LOCAL ADVENTURE_______________________
Oliver’s Modern American will open in Scottsdale this May
After months of anticipation, Clayton Companies is once again boosting South Scottsdale’s dining cred with the opening of Oliver’s Modern American. The new dinner restaurant and lounge is located at 3207 N. Hayden Road, next to sister restaurant, The Eleanor. Oliver’s will open in an iconic mid-century building that was saved, moved, and rebuilt. The grand opening is scheduled for later this spring.
The first thing guests will notice is the distinctive triangular roofline of the 1960s Polynesian-style building designed by noted architect Ralph Haver’s firm. Once the country’s only Polynesian Dairy Queen, the building was located three miles away at McDowell Road and 68th Street. Local real estate developer Tom Frenkel stepped in when the building’s owners were readying its demolition in 2019.
See something that interests you in the April 2024 Newsletter? Contact me and we can check it out together!
Feel free to call me directly at 602-791-0091.
