TRENDING REAL ESTATE NEWS_________________
Quarterly Housing Summary from ARMLS Q1 2024
As reported by ARMLS (the Arizona Regional Multiple Listing Service), Q1 2024 shows that median sales price in Maricopa County increased by 7.9% on an annual basis. The average sales price increased even further, by 9.4%. Even while the prices are increasing, sellers are still receiving an average of 96.1% of their list price.
Additionally, days on market declined by 16.7%, while homes for sale and months supply both significantly increased. But the months supply is still only 2.4 months worth of housing. What does this mean?
In real estate, a balanced market, characterized by a proportional presence of both buyers and sellers, typically maintains a supply range spanning from 5 to 7 months. Once this threshold is surpassed, the landscape tilts into what is commonly termed as a “Buyer’s Market,” indicating an abundance of supply and favoring the buyer’s position. Conversely, when the supply dwindles below the 5-month mark, it moves into what is known as a “Seller’s Market,” granting home sellers the upper hand in negotiations.
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MARKET UPDATE_______________________
Spring Season was a Snoozer. Will Summer be the New Spring?
Greater Phoenix is in a Balanced Market – What Sellers Need to Do
For Buyers:
“So we keep waiting, waiting on the world to change.” ~ John Mayer
Mortgage rates have remained stubbornly high in 2024, continuing to suppress demand. As a result, the spring buying season was a dud this year for sellers. For active buyers, higher mortgage rates have led to less competition, fewer properties with multiple offers, accommodating sellers, more homes to shop in good condition, and a relaxed buying process.
As supply gradually rises, new listings have lingered on the market 5 days longer than last year and weekly price reductions are up 63%. How long this condition will last is as predictable as mortgage rates, which have been volatile and unpredictable for 2 years. If they do in fact decline this year as expected, then buyer demand will return in kind. After peaking in April at 7.5%, average rates have already declined to 7.1% in response to a stabilizing job market. However, they’re still too high for the housing market to see a measurable shift in buyer demand. Recent history has shown a sustained increase in activity when rates have fallen below 6.5%.
Industry leaders and the Federal Reserve have expressed their expectation that rates will decline this year, with both Fannie Mae and the Mortgage Bankers Association predicting 6.4% by the end of 2024. If they are correct this time, then summer could be the new spring for home buying this year.
For Sellers:
The Greater Phoenix market is officially in a balanced state, which means the days of “dump your junk” are over for now. When there was little competition for sellers in 2021 and 2022, it was common for buyers to purchase homes in “as is” condition. These homes needed roof repairs, new A/C units, carpet replacement, paint, updating, and other renovations to bring them up to par, but they sold anyway with little effort due to the extreme market conditions.
By 2023, the seller’s market had weakened. Low supply meant properties in sub-par condition would still sell but with allowances for carpet, paint, negotiated repairs, and lower prices.
Now in 2024, most cities are either in a much weaker seller’s market, balance, or a full-blown buyer’s market. Supply is up 44% over last year and has reached a level similar to pre-pandemic 2017-2019. Supply is still 27% below normal, but it’s balanced out by demand that is also 20% below normal, suppressed by high mortgage rates.
Under these conditions the market has seen higher marketing times and an abnormal spike in cancelled listings. In a balanced market, it’s important to prepare homes for sale prior to listing and dismiss the idea that a buyer will accept a carpet allowance and credit for repairs over competing homes that are move-in ready. Buyers don’t want to choose their own carpet and paint. They don’t want to do repairs. It pays to take care of these items in advance prior to the first showing to reduce the time on market. As supply rises, the effort is not about increasing the sale price, it’s about ensuring it will sell at all.
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_______________________
Homeowners Insurance Costs Are Soaring: 5 Ways to Fight Back
In many parts of the country, home insurance rates are spiking 50% or more. Take these steps now to ensure you’re getting the best deal. In Arizona, as of September 1, 2023 rates from the largest carriers have risen by a weighted average of 18.4%.
These increases are hard enough when you have a decent income. For those on lower or fixed incomes, increases like these can literally price you out of your home. And for those with mortgages, you’re required to have coverage.
What’s a homeowner to do? Here are a handful of ideas to fight back against these soaring rates.
Photo by Oscar Sánchez on Pexels
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2024 Home & Garden Design Trends to Watch for in the New Year
Check out these home and garden trends that will take centerstage throughout 2024. See what to look for and how to incorporate these home and design trends into your space.
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How Much Does It Cost To Install An HVAC System In 2024?
If you’re looking to keep your home at a comfortable temperature this year, installing a new HVAC system is a smart consideration. Setting up a new system would cost you around $10,000 on average. Costs vary widely, from high-end installations hitting $15,000 to budget-friendly options around $5,000. In this guide, we’ll break down the costs of HVAC system installation and offer insights to help you make the best decision.
The average HVAC system installation cost can vary depending on several factors. These factors include the size of the home, the type of HVAC system being installed and the complexity of the installation process. House owners can expect to pay around $3 to $7 per square foot for the installation of a HVAC system
Photo by José Andrés Pacheco Cortes on Pexels
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LOCAL ADVENTURE_______________________
The Four Seasons: An Evening at Desert Botanical Garden
The Four Seasons makes its triumphant return to Desert Botanical Garden. Set to Vivaldi’s iconic score, take a journey in movement through spring, summer, autumn, and winter, featuring costumes designed and hand-painted by Artistic Director Ib Andersen, with the backdrop of the matchless desert landscape and the setting sun.
Music: Antonio Vivaldi
Photo by Yogendra Singh on Pexels
See something that interests you in the May 2024 Newsletter? Contact me and we can check it out together!
Feel free to call me directly at 602-791-0091.
