Phoenix Housing Market Stuffed?
After a terrific Thanksgiving weekend eating, drinking and being merry with friends and family many of us went back to work on Monday feeling stuffed! Does this sound familiar? The Phoenix Housing Market seems stuffed too, lethargic, stagnant and relatively unimpressive. Or is this what a normalized market feels like?
The Greater Phoenix area housing market has experienced relatively sluggish demand and relatively low sales activity for the last few quarters and as fewer people seem to be buying, inventory is slowly increasing for both new and resale homes. Direct results of the investor led “over eating from 2011 – 2013” are the lower number of new single family housing starts, the increase in overall for-sale inventory and the strengthened rental market, demonstrated by considerable increases in both rents and construction permits for new multi-family projects.
After the housing crash of 2007, the Phoenix-area median home prices soared from September 2011 to September 2013 by over 40%. This year, prices have leveled off as the median single-family-home price is up only 5 percent from September 13 to this September 14 — from $198,997 to $209,900. Only 5 percent annual appreciation? In most markets a 5% increase is a healthy and manageable level of appreciation. Have Phoenicians become too used to the dramatic swings both up and down? Possibly.
Where are the Greater Phoenix Housing Market Buyers?
So what has happened to all the buyers? New Home and Re-sale home buyers are looking more than they have in the last 7 years…so why are they not buying? Why are they looking and not touching?
Many potential home buyers still suffer from the 2007 Housing Crash Blues, those with finance issues and those with confidence issues. They may not qualify for a loan or they don’t believe they should qualify. They may want to move, but some don’t have enough equity in their existing home or they cannot afford the down payment. Most lenders today require at least 10% down. The days of zero to five percent down have disappeared long ago and don’t seem to be coming back any time soon. Many buyers were deeply bruised by a past foreclosure or short sale and are still locked out of the market.
The Answer is, there are plenty of Buyers…however the majority of them still have some sort of financial issue precluding them from buying yet they are all still potential buyers that want to buy. 2015 is hopefully the year that many of those folks foreclosed on in 2007 and 2008 can re-enter the market and as long as they have relatively stable jobs and banks cooperate they should become real “buying” buyers again.
Home Sale Deals in Greater Phoenix can happen over the Holidays
While the rest of the country hunkers down for a long cold winter, Phoenix enjoys some of the nation’s best weather this time of year. Many potential seller’s in the northeast or east coast are too busy shoveling driveways, buyers in the pacific northwest won’t leave home without their life jackets and in general the weather throughout the country makes buying and selling homes very difficult. NOT in Greater Phoenix.
The next few months in Greater Phoenix is typically one of the most active times for the housing market. In fact the first three months of year are some of the region’s strongest in regards to transaction completions. Most of the closed transactions are a direct result of deals made during the holidays. Don’t let the holiday’s scare you…try your luck and list your greater Phoenix house with Amy Koch over the holidays.