by Dru Bloomfield on October 22, 2009
The media talks about the hot Phoenix real estate market, yet most home sellers I meet are still operating from a perspective that no one is buying homes these day, because the market is so bad!
However, any home buyer will tell you, it’s a battle out there. Multiple offers are common in the lower price ranges, and with the deadline of the $8,000 tax credit coming up quickly, last-minute shoppers are finding that a full-price offer is often not enough.
You see in the chart above that overall Phoenix has been experiencing a seller’s market since May of this year. You can also see that the steep incline has been tapering off over the last couple of months.
When you look at the next chart showing Months Supply by Price Range, you will see that this year’s trend continues: The lower the price of the home, the lower the housing inventory.
We are seeing just a bit of change though. The Seller’s Market that we were experiencing this summer is cooling off in the $250-350K range.
- Homes priced up to $250K have less than five month’s supply. Seller’s have the upper hand here. Multiple offers are common.
- Between $250,000 and $400,000, we are seeing a balanced market.
- Over $400K, Buyer still have a lot of negotiating power, depending on how the Seller has priced the home.
If you’d like to go back and see where the market was earlier this year, these two posts will help:
Buyers Market? Sellers Market? Depends. – August 2009 view
Why is Scottsdale real estate market behind the curve? – June 2009 view
With the tax credit possibly coming to an end, the slight changes you are seeing here could continue, even more significantly. I think most would agree that any movement towards a more balanced market would be a welcome reprieve after the roller coaster ride of the past several years.
by Dru Bloomfield on August 3, 2009
If you planning to purchase a home before the $8,000 tax credit deadline hits, or you’ve had your eye on the luxury market, you need to know where you stand as you craft your offer to purchase real estate in Scottsdale, or any of the surrounding cities.
If you are looking for a home priced under $350,000, know that you are not alone, and the pickings are thin. Multiple offers and competing with cash buyers are just two of the challenges, particularly with foreclosures. The good news is that I’m seeing more listings from primary home owners who are motivated to sell their homes and are pricing them to compete with the bank. And when these well cared for and lived-in homes are priced aggressively, they do sell in very short periods of time.
We are no longer in a real estate market where a buyer can assume that they will find the house of their dreams in their price range, located in just the perfect area. Not when there’s less than a 3-4 month supply of homes in these most affordable price ranges. It’s tough. Home buyers quickly get an extreme appreciation of just how competitive the market is right now.
For those looking in the price range of $350-500K, the market is considered “balanced”. About the right number of homes, when balanced with the number of home buyers.
Once you start looking above the $500K range, and especially above $800K, you can see that there is a glut of inventory. Home sellers in this price range have more staying power, and unless they are truly motivated, have not reduced their prices to what the few luxury home buyers are willing to pay. This is where I think we will see the biggest price changes in the next 12-18 months. At least that’s my hope. Seven years of inventory is unheard of, yet that is where the market over $3M sits.
If you are a home buyer, before you do anything, get your financing in order. So much has changed, and even well-qualified buyers are jumping through hoops to provide all the documentation that is needed now. Then, roll up your sleeves and get ready to move quickly. That is what it takes! Time really is of the essence.
And, if you are home seller, with a home that should be priced $350K or less, know that you have some power in the home sale negotiation again. Clean it up, price it well, and make it easy to show!
by Dru Bloomfield on April 5, 2009
The generally accepted definitions of a buyer’s or seller’s market in real estate:
- More than 7 months of inventory (listed homes for sale) is a buyers’ market.
- Five to seven months is a balanced market.
- Five months or less is a seller’s market.
From the looks of this chart (data courtesy of the Arizona Regional MLS), we have entered a balanced market. In reality, the lower end of the market is behaving more like a seller’s market, and the upper end is still very much a buyer’s market.
Will be interesting to see how the next couple of months play out.
by Dru Bloomfield on October 27, 2008
So, is the market coming?
Or going?
I ran the First Responder Run to help the Arizona Autism Support yesterday, planning to run a 5K. Turns out that the 5K and 10K routes shared the same path and I missed the turnaround. Oops! As time progressed, I realized my mistake and decided to flip around, so I wouldn’t hold my family up who was waiting for me at the finish line.
I’ve been training and was really intent on improving my race time, and suddenly my plan was trashed. So I spent some time really enjoying my run and experiencing some of the free-form thinking that comes from being in that space.
Suddenly, I realized that my “mistake” was so similar to some of the real estate feedback that I’m hearing from some buyers who are trying to time the market and buy at the “bottom”. And my question is, have we hit the bottom (in some sense of the word), here in Scottsdale, but maybe missed the signs?
Take a look at this Altos Research chart on for Market Action in Scottsdale. In their proprietary calculation, anything above a 30 signifies a seller’s market. Interesting to see that we in an overall improving market, contrary to what some other areas of Phoenix and the rest of the country may be experiencing.
Changing Scottsdale Market
I have been working with several buyers who’ve decided that now is the time to buy and are closing this week. One is a first-time buyer, another is purchasing a vacation home, and yet another is relocating to the area for a new job. Other first-time home buyers and investors are still looking, knowing that now may be an ideal time to negotiate and buy. As one buyer said last week, even if the market trends downward for a bit longer, I’m planning on staying here long enough, that it doesn’t really matter to me.
So, the more important question to ask “Is now the right time for you to buy a house, a home, or an investment?” Opportunities exist in any market, and only you can make the decision that is truly right for you.
by Dru Bloomfield on September 3, 2008
Scottsdale single family homes have been selling faster than new homes were listed for the past three months. We are beginning to see the increased activity that typically comes in the fall season, too. More homes are being listed, yet they are selling at a higher rate than they are coming onto the market.
The same trend is holding for condos, although the shift occurred slightly earlier, in the May time frame.
A bit of positive news for sellers, and a reminder to buyers that this heavily favored buyer’s market will not last forever.
by Dru Bloomfield on August 4, 2008
Market Action is a proprietary Altos Research statistic that tracks where the market. Tilted to the buyer or the seller. Index under 30 indicated a buyer’s market.
From the chart for single family home activity, it’s easy to see that we have been stagnated in a buyer’s market for over a year, and that since spring, we have not seen any real improvement or degradation in the market.
In this chart, you’ll see that market activity in South Scottsdale (85257) is greater than midtown (85250), further north (85260), and in far North Scottsdale (85262). This is to be expected, as prices in the south part of town are more affordable to a greater number of buyers.
For more information on the price, size, and age of homes in Scottsdale, relative to location, see: Scottsdale Real Estate: Does Size matter? Age? Location?
