TRENDING REAL ESTATE NEWS_________________
5 Metro Phoenix ZIP codes with Biggest Median Home Sale Price Increase
Greater Phoenix’s residential real estate market weathered unprecedented challenges in 2023, with factors such as a shortage of listings, record-high mortgage rates and hesitant sellers making it the toughest year for the market since 2009, according to the latest market data reports from Phoenix REALTORS.
Yet despite the challenges, REALTORS are turning their gaze towards a more promising 2024, as they witness signs of improvement and new opportunities on the horizon. And five Metro Phoenix ZIP codes distinguished themselves for having the biggest home sale price increase in 2023 compared with 2022.
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Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again?
Home buyers have their fingers crossed that 2024 will be the year where home prices regain some normalcy. There is one promising sign as we enter the new year. Mortgage rates, which remained stubbornly high throughout 2023, have steadily declined over the last couple of months. The average 30-year fixed rate now sits at 6.69% for the week ending January 25, according to Freddie Mac.
Despite this easing, mortgage rates remain elevated and home prices are stubbornly high as historically low housing stock continues to put homeownership out of reach for many—most notably first-time buyers—who remain more pessimistic than ever about being able to afford a home.
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MARKET UPDATE_______________________
How Presidential Elections Affect Housing
Starter Homes are a Hot Market in Greater Phoenix
For Buyers:
With many existing home owners comfortably staying put these days, more attention is placed on first-time home buyers, affordability, and supply of homes. The first thing that comes to mind is the choice between renting and buying. According to RealData the median cost of a 3 bedroom apartment at a 50+ unit complex in Q2 2023 was $2,100 per month in Maricopa County. The median size is roughly 1,250 square feet. The past 30 days of sales show the median sale price of a 1,200-1,500 square foot, 3+ bedroom single family starter home to be $370,000 in Greater Phoenix.
Many first time home buyers put down 3.5% on a FHA loan ($13,000 on $370K), and last month nearly 70% in this price range had a seller or builder agree to contribute to closing costs with a rate buy-down. That’s a median contribution of $10,000 from the sellers. On February 1st, the average FHA rate was 6.0% according to Mortgage News Daily. With a 2/1 buy-down from the seller, the first year estimated payment would be $2,159 per month, including taxes, insurance, and PMI. A permanent 1% buy-down would equate to $2,375 per month. This puts the monthly cost to buy a small starter home within a few hundred dollars of the median rental rate.
Pinal County
In Pinal County, the median cost drops to $310,000 and over half of the properties sold in the past 30 days are newly built within the past 5 years or under contract for 2024. On a 2/1 FHA buy-down, the estimated PITI payment is $1,825 per month and a permanent 1% buy-down would be $2,006.
Currently there are 366 active single family listings between 1,200-1,500 square feet, with 3+ bedrooms, under $370,000 in the Arizona Regional MLS (Pinal County has 53% of them). There are 312 listings under contract and 191 closed in the last 31 days. This is a hot market segment.
2024 is expected to be another year of change for the Greater Phoenix housing industry, but this time the shift is expected to be towards stability in home appreciation and improved affordability measures as incomes catch up. After hitting rock bottom for demand in 2023, things are looking up.
For Sellers:
It’s an election year! Every four years there is an expectation that the drama, uncertainty, and manipulation that comes with presidential campaigns will dramatically affect the housing market, specifically prices or mortgage rates. Spoiler Alert: It doesn’t. The main influence on the housing market comes from policies, not the elections themselves. For instance, the stimulus packages and policies that were passed during the 2020 COVID-19 election year and continued into the next administration were the first stones to cause a ripple effect of fortunate and unfortunate events in the housing market over the past 4 years.
So what’s to be expected this year? There is one market that can be affected by an election, and that’s the stock market. After the last 4 elections, the stock market has responded positively afterwards, which affects both luxury buyers and retirees with a high percentage of cash purchases. If a cash buyer expects their investment portfolio to be worth more after an election, they may simply put off their home purchase until the Spring. This can cause contract activity to stagnate for a couple months, but not enough to affect prices, and this mild affect can be offset by other mitigating factors, like seasonality, that would make the impact unnoticeable.
Listings Under Contract
So far in 2024, listings under contract over $1M are higher than 2022, which is the #1 record year for this price range. Active listings over $1M are also at record highs, which is offsetting the increased demand and keeping price appreciation stable. Retirement communities are not experiencing the same however, as this segment is highly sensitive to inflation. When prices for necessities are high and uncertain, many buyers in this segment will choose to keep their cash for safekeeping. Perhaps they’ll feel better after the election.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC
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FOR THE HOME_______________________
2024’s Essential Checklist for Preparing Your Outdoor Space
As we enter 2024, it’s fascinating to see how indoor and outdoor living boundaries are increasingly merging. Nowadays, our outdoor spaces have evolved into crucial extensions of our homes, perfectly marrying practicality with style. It’s all about creating areas that are not just aesthetically pleasing but also highly functional.
This guide is crafted to assist you in preparing and optimizing these spaces. You may be looking to host gatherings, relax in solitude, or engage in outdoor hobbies. We will help you create an outdoor space that’s adaptable and enjoyable all year round.
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Forget Formal Dining—Everyone’s Cooking It Up In Kitschens In 2024
The past few years have seen the rise of all things maximalist and eclectic in home trends, from dopamine decor to cottagecore. According to Pinterest, that’s not set to change in 2024. According to the 2024 Pinterest Predicts report, kitschy kitchens—aka kitschens—are here to replace your refined dining area.
The pinning platform found that search terms like “eclectic kitchen decor,” “kistchy kitchens,” and “eccentric kitchens” are trending. This demonstrates the desire to bring some fun and nostalgia to a traditionally utilitarian space. Retro styles are making a comeback across interior design. As a result, experts aren’t surprised that the kitchen is the next room to get the kitsch treatment.
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LOCAL ADVENTURE_______________________
USA Pickleball will host national championships in Mesa
USA Pickleball,
the National Governing Body for pickleball in the U.S., today named Mesa, Arizona as the location for the 2024 Biofreeze USA Pickleball National Championships, the premier tournament in the sport of pickleball.
Pickleball Nationals will be hosted at the Arizona Athletic Grounds from November 10-17. We are welcoming competitors around the country to sunny Arizona.
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Farmers Market North Scottsdale
Welcome to Farmers Market North Scottsdale. “Our happy place!!” Our goal is to bring the community together while giving back and supporting Local Small businesses! FMNS IS NOW OPEN THROUGH APRIL 2024! Check our locations for more details.
As you stroll through our markets, we offer a wide variety of fresh local products. These include Fresh Produce, artisans, Pantry items, Food Trucks and so much more! FMNS strives to create a space where families and friends can decompress. Come meet some happy new faces and get your shopping done for the week. So come on out, and stop by and say Hello at our Info Booth! We would love to meet you and get your feedback. Help us continue to BEST serve our incredible Scottsdale community!
See something that interests you in the February 2024 Newsletter? Contact me and we can check it out together!
Feel free to call me directly at 602-791-0091.
