The 4th quarter is the best season for buyers.
44% of the closed sales on the MLS last month have included seller concessions to the buyer!
- Oct - Dec is seasonally the best time to be a buyer- fewer competitors, more choice
- Greater Phoenix glided into a buyer’s market in mid-November, joining Buckeye, Maricopa, Queen Creek, Surprise, Chandler, Gilbert and Tempe which entered in the summer. Goodyear, Peoria, Avondale and Mesa fell in last month. The only holdouts remain in the Northeast Valley cities of Paradise Valley, Fountain Hills, Cave Creek and Scottsdale.
- Closings with?seller-paid closing costs continues to grow, averaging 44% last month (normal market 35%), especially in areas on the outskirts like Casa Grande, Maricopa etc where the number was 50%. For West Valley zips in Glendale and Buckeye, the number was 70%. For homes under $400k, this number reached 58%. Homes over $1mm ~ 15% concession rate. Median concession =$9,000
- Mortgage rates stabilizing, with recent drops to mid 6%s
- Buyers should use tools like?the “Lock and Shop” option, offered by some lenders to allow buyers to?lock at an acceptable rate for up to 90 days.
- The Phoenix Valley continues to grow in businesses, employment centers, jobs and housing developments. Be sure to check out the Cromford Report (free for my clients) below for detailed analysis on the Valley's hot spots for growth to inform your investment plan.
- Fewer sellers are opting to sell in this market. Historically, October typically adds about 10,000 new listings to supply, but this October was the lowest recorded at just 7,334 new actives plus 188 in Coming Soon status, a record low for the month. This has caused supply to stagnate over the past 4 weeks and is a small relief for existing sellers.?
- You have to be careful about how you price your home. In a correcting market like ours,?it is more important than ever not to price your home too high.?If you do, you could end up “chasing the market.” In this scenario, your initial price is too high, and buyers won’t look at your home. You could try lowering your price, but by that point, the market may have changed again. This is a seller’s worst nightmare—if it happens, you may even have to take your property off the market and try again later.?
- One strategy that works in a shifting market is to price your home slightly below market value on purpose. This will guarantee that your home is the most attractive deal in your area. If everything goes according to plan, buyers will flock to your house, and the competition among them will naturally bring the price up to or above market value. The risk with this strategy is that if only a few buyers come to your home, there might not be enough competition to drive up the price. However, this is a fantastic option if you need to sell quickly.?
- 65% of Active Listings were purchased more than 2 years ago - Sellers who have owned their?homes for more than 2 years are typically?sitting on?more equity?and are able to easily sell with a significant profit despite small decreases in price or taking care of closing costs.?
- Expect more days on market - 44-59 is normal for Q4 listings as we head into the holiday season
The bottom line is that sellers can still achieve fantastic results in this market as long as they do their research and price their homes correctly.?
Work with a real estate professional like myself to look at comparable sales in your area and find an optimal price. This can be difficult to do on your own in a correcting market, but professionals have access to market data that will make the process much easier.?
