It’s the middle of August and kids are back in school, which tends to signal the end of summer around these parts. It also means some of the annual seasonality with a summer lull in the Real Estate Market is drawing nearer to a close (or so we hope). It’s really hot here in June and July so many of the people who aren’t out of town on vacation don’t exactly feel like house hunting in 110°. For the 19 summers I’ve been in business, the pattern has been similar. As we approach the end of August and beginning of September, we see and hear from a new crop of prospective Home Buyers & Sellers, some looking to make their move before the holidays and year end and some preparing for the beginning of the next calendar year. 📅
This year is a little different because inventory didn’t just rise and demand soften due to a seasonal slowdown. Our market shifted… but we knew that would happen… and it’s okay.
As I provided a long synopsis on the market three months ago, I will echo some of the same sentiment now… The sky has not fallen!
On Google, searches for “will the housing market crash” have risen dramatically of late, but that’s largely due to headlines meant to scare and grab attention, some National and others local.
That’s why I am here… I live in the market EVERY SINGLE DAY. I research the numbers, analyze data, discuss the trends with other professionals and use my experience to make suggestions to clients while educating anyone who will listen.
There are still plenty of Gimmicks & Charades out there… but many have learned what those alternative models are about. Unfortunately some have learned the hard way and regret certain decisions.
The stock market has been a bit better over the past month, but concerns still exist in some sectors.
Gas prices have dropped back down closer to $4/gallon, which can seem like a bargain, but they’re still well above where they’ve been the past couple years.
Food costs are not receding at this time and expectations are to climb further before year end.
The word recession is being thrown around all over the place and it can strike fear into many. In reality, it’s a period of economic decline which would be expected during high inflationary times. From a real estate perspective, a recession does NOT equal a housing crisis or collapse, however.
For markets like Phoenix (ours) where prices shot up so fast, they can indeed be some of the first to see a step backwards… and we have in many areas already. Price reductions have been plentiful, but a minor correction is not unhealthy for the overall state of our market.
One should not expect values to only go up. It’s a market and there will be price movement.
Inventory quadrupled in 3 months and today the valley sits at 15,401 Active properties for sale with another 803 “coming soon”. This means options for buyers and competition for sellers.
Mortgage interest rates seemed to peak in June and have since relaxed back down closer to 5% with some FHA / VA clients getting locked in underneath. Those are much more tolerable.
Sellers have learned homes don’t always sell in one day. They are making more repairs, pricing more aggressively, offering incentives toward interest rate buy-downs, etc. This is all good news for Buyers.
Many people sat on the sidelines over the past couple years wanting to make a move, but were not able to do so. Conditions have changed and you can now sell your home and buy the next contingent upon one another.
New Construction continues to build, but sales have slipped… this means incentives are coming back. Money toward closing costs, options & upgrades, rate buy-downs, etc.
When you look back nearly 15 years ago to the big collapse that occurred in 2008,
the run up beforehand was not the same as what we’ve experienced leading up to now.
There was a surplus of homes available back then, but even with our higher inventory levels today, it’s not enough. Our population has risen and builders weren’t building enough homes annually coming out of the Great Recession.
Real estate has also proven to be a great hedge against inflation in the past and mortgages are structured differently, with many sitting on huge equity. Even if they got into trouble, that wouldn’t mean foreclosure was the only option.
A market correction is NOT the same as a market crash… I’ve long believed we would see a 10% step back at some point, but if your home went up 100% since 2018, you’re doing just fine.
It’s okay to be nervous… it’s okay to be cautious… and it’s okay to get educated so you can move when you’re comfortable.
We’re here to help whenever that time comes!