Maricopa County Real Estate Outlook: Is Now the Time to Buy or Sell?

Is anyone out there in my real estate world looking to volunteer at a charity?

I've got connections with soup kitchens for one evening spots, Free Arts for Abused Children for an evening or Saturday for a couple of hours, Valley Interfaith Project's affordable housing for 55+ has an upcoming meeting in Chandler, and more.

Reply back if you'd like to join me in making a difference locally.

Lately, numerous previous clients have mentioned wanting to have/increase their housing portfolio:

I'm always up for a challenge, so this is an announcement of my willingness to learn how to do a live online event. The intention of the meeting is for my past and future clients who are considering investing more in real estate, or have up to a couple of homes already in their portfolio, and want to learn and network. We'll initially start by talking about the whats, hows, whys, and whens in a broad way for the first meeting or two. Then,after taking some time in the very beginning to get to know one another's goals, dreams, the future meetings can be tailored to the needs of the attendees. Sounds fun and interesting, right?

Reply back to this email if you'd like to get on the list for more details.

What is the real estate outlook for the Valley of the Sun in the future?

• The weakness of supply is the main factor to consider when studying the current housing market. Despite the low number of homes going under contract, the number of homes for sale (without a contract) dropped another 6% and is now below 12,000. This is an unhealthy supply and pretty much impossible for prices to decline when supply is so weak and trending lower.

• In the very long term (over decades), a shortage of water could cause net migration to drop and even turn negative. This would generate more supply and cause downward pressure to build up on prices. But that ain't happening right now, despite the news.

• Without such a macro-level change in circumstances, the supply of single-family homes and condos for sale looks set for long-term scarcity.

• Fannie Mae is predicting that interest rates will be in the high 4% range by the end of 2024.This could be amazing news for future buyers and will hopefully break loose some sellers from houses they aren't in love with anymore.

• There are officially no cities left in Maricopa County that are in buyer's market territory, though we do have two that are considered balanced now (Maricopa and Buckeye).

• More Down Payment Assistance programs are coming out to play.

• Swanky FHA loan stats. (Yes, FHA is now the cool kid on the block.)

  • New loan limit is $530,150.

  • Mortgage insurance premium is reduced.

  • FHA has better interest rates than conventional for most buyers.

  • Seller-paid closing costs can now go up as high as 6% of the sales price. Finding a seller willing to do that, though, is getting much harder.

If you would like chat about anything real estate, simply reply to this email or call/text me at 602-730-2143 for more details.

Thinking about selling? In most areas of the Valley, you'll be the poop with Buyers buzzing all around you. (Maybe not the best visual.)

• In the graph above, 2023 is the orange color all by itself at the bottom. 2022 is blue.

• A spike in mortgage rates at the end of May meant we entered June with a weak count of listings under contract, down over 9% from the beginning of May. This means we should expect relatively unimpressive closing counts for June. (Sad face inserted here.)

• Unless we get a significant reduction in mortgage rates, the affordability of homes will remain a major problem. (Duh!) This will constrain sales volumes, but it is very unlikely to put downward pressure on pricing.Instead we are much more likely to see a long-term price appreciation trend setting in once more, with the chronic shortage of supply the overarching unsolved issue.

• Year over year appreciation for Maricopa County will most likely beat or above last year's peak by July or August 2023when using the average sales price by square foot method.

• If you have owned the same home for the past 6 years, you have made about 89.5% appreciation; for 5 years it is 73.9%; for 4 years it is 65.9%; (I know this is a lot of numbers, but hang in there!) for 3 years it is 58.1%, for 2 years it is 13.5%. To put that in perspective,a modest $300k home 6 years ago is now worth $568,500.(NOTE: even though I personally don't expect to have that kind of run up on appreciation any time soon, I am expecting 4-6% appreciation for 2023 and more beyond that. Even $20-30k appreciation per year is far better than most other options out there for people who need to live somewhere anyways.)

• New listings are AGAIN at the lowest levels we've seen in the past 23 years. Ggggrrrrrr.?

If you are considering buying a new build, or a resale home, call/text me at 602-730-2143. I would love to be "Your Dedicated Home Advocate."

I'm biased against corporations and pretty much proud of it!

• In my not-so-humble opinion, I don't think that corporations should be allowed to compete against owner occupants in buying homes. They can over pay, with cash, and they ruin affordability more than regular folks could do. Not only that, but they also have thousands of homes all across the valley. The more they take up the limited inventory and turn them into rentals, the harder it will be for our population to own a home to help create generational wealth.

• It is common knowledge that demand is sensitive to interest rates, but thinking that higher interest rates lead to lower prices is simplistic and wrong. In the current environment, higher interest rates dramatically reduce the desire to pay off low-interest loans and so dispose of property. Those who bought at the peak during the first half of 2022 may be underwater, but unless a dramatic change in their circumstances makes their financial situation desperate, they are unlikely sell the roof over their heads.

• If supply were to rise, then a cooling trend could start to build. The monthly releases of building permit data suggests that future supply will be strong for rental multi-family property, but single-family homes to purchase are being planned in ever smaller numbers. The recent decision to restrict future permits because of water concerns means that situation is likely to remain in place for a long time. The market will see less volume than we have become used to, but prices will be reinforced by the chronic supply.

• I have a really cool graph about single family permits I can share. Let me know if you want me to email it over. This year's permits are 49% LOWER than normal. However, multi-family permits are 32% higher.

• In April 2023, Open-door bought 32 homes and sold 209. Offer pad bought 5 and sold 39. I'm CRAZY happy that they are getting out of the owner-occupant's way, even if it is just temporary!!!!

• Active rental supply is going up.

• So far this year, we've been matching the 2019s market on the Cromford Market Index. That was a good year to be a homeowner.

If you would like to chat about down payment assistance, credit, home warranty options or if now is a good time to buy for your situation, please either reply to this email or call/text me at 602-730-2143.

Follow me on TikTok, Instagram, and Facebook at "Nancy Realtor" for all sorts of real estate content and some weird randomness thrown in for fun.

In fact, I've started doing different series specifically tailored to for Buyers, Sellers, and Renters, we'll cover topics such as negotiation techniques, home improvement, credit scores, escrow hurdles, market updates, recent news articles, and so much more.

Nancy Wittenberg