The Arizona Real Estate Market is in the middle of a dramatic shift, but are we moving from a Seller’s market to a buyer’s market?
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Why it matters: We are seeing a dramatic change in the market from where we were just 30 days ago, which can significantly affect our economy and a consumer’s ability to buy or sell a home.
Sellers are concerned they have missed the market and will no longer be able to get top dollar when they sell.
Buyers are looking forward to a more affordable market with increased home choices, fewer homes going for cash, or multiple offers above list price.
What’s Happening: Inventory in the area has rebounded from historic lows to about half of what is traditionally available for sale. At the same time, economic factors, including rising interest rates, historically high inflation, and a falling stock market, are reducing the number of buyers in the market.
- The number of homes for sale in Maricopa County has increased 620 percent since the first of the year, from 2,022 (Ironically) homes to 24,560.
- The number of listings with price reductions has risen from only 462 in the first week of the year to 3,140 last week.
- The monthly average price per square foot for a luxury home in Scottsdale has dropped for the first time this year from a high in June of $557 per square foot to $524 this month. A six percent drop.
Between The Lines: The past two years have seen incredible price increases in home values in Scottsdale and most of the Valley. As a result, sellers have never enjoyed a more robust market. But, in record time, the tide has changed, and while we are not there yet, the overwhelming question is, are we headed toward a buyer’s market?
The Bottom Line: It is time to change your real estate perspective.
Sellers need to realize they need to become more competitive in the market. They need to set the price for a home correctly when first listing it. The price is likely to be a lower price than they might have hoped to receive. If activity is low or non-existent, it is probably time to either remove the home from the market or lower the price.
Buyers can be pickier and need not rush to put in an offer above the list price. A buyer has more breathing room to search for the right home. Buyers need to be sure they are pre-qualified at current interest rates or can show sufficient cash to close. As rates change, the amount of home a buyer can afford is likely to change also.
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