credit: Dru Bloomfield – At Home in Scottsdale and Altos Research
In looking through the Altos Research charts for Scottsdale real estate today, you can see we have headed into another downturn in the market over the last several weeks. The Altos Market Action Index shows slowing in all Scottsdale markets, across all zip codes.
My suspicion is that many people are focused on the holidays. At the same time, I’m seeing that many buyers are still very focused on searching through the new listings, keeping track of pricing changes, and asking me to refine their home searches. While there are not a tremendous number of new homes going on the market during the last couple of weeks of the year, sellers are focused on preparing their homes for listing in January. Our warm winters and huge events (golf, horses, and cars) attract visitors in droves and these sellers want to be ready.
I believe that after the first of the year, real estate will become a bigger focus for first time buyers and winter visitors / part-time residents. Why?
- Home prices continue to drop. Sellers (those that are motivated) are listing their homes at more realistic prices. Foreclosures and short sales are driving home prices down, and have an impact on normal, non-bank involved home sale prices.
- Interest rates are excellent. Rates dropped to 4.5% briefly for one morning this week and are now back up to the 5% range. Most lenders are writing about the refinancing boom, but these good rates also help home buyers, too.
- First time home buyer tax credits will expire. The government has created a tax credit program, that’s really interest-free loan. The program expires in July 2009, so will provide an additional incentive for first time home buyers who believe it’s a good time to purchase a home.
So, while it looks a little slow now, all that could change fairly quickly during January. Time will tell.
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Twitter: buytucsonlots
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Dru, what about these two factors?
1. Access to credit seems to be very tight. It’s tougher to get approved for credit these days; and there doesn’t seem to be enough capital available. Isn’t this going to adversly affect the ability to purchase homes or refinance?
2. As market prices continue to fall, and homeowner’s equity falls with it, isn’t that going make it more difficult to refinance?
Twitter: drubloomfield
12.31.08 at 4:10 am
Hi Ernie,
Credit approvals have tightened up, but buyers are still getting loans. They need to document income and assets much more thoroughly.
Re-financing will face similar issues, yet for homeowners who purchased more than five years ago, and have not taken out and used a home equity line of credit, the situation is more promising.
Home sales in the Phoenix area this past fall were up over last year. Buyers are still relocating to the valley. First time home buyers who have been saving and waiting to buy are seeing opportunities. People who are thinking about retiring are looking at second homes, that could become a primary residence somewhere down the line.
Rationality has returned.