Should I move? Can I move?
/When is the best time to make a move? This is John Schloz with this month's market update.
The best time to make a move is always when you or your family has a need that requires a move -
a new baby, kids off to college, moving to or out of town for a job. Quality of life is important so when life says move,
I'm here for you.
But how about if you just have the itch to make a move. How do you know if it's a good time?
One rule of thumb is it's always a good time to buy or sell if it's a seller's market.
In a seller's market prices tend to increase faster than in a balanced market. Selling you house in a seller's market is
advantageous if you're selling and buying to move up or down. You may not get top dollar for your sale, but you also
won't PAY top dollar for your purchase. If you wait to sell at the very top of the market, you'll need to buy at the top
of the market so there's no advantage to waiting.
Some sellers today think the market is due for a downturn and they think - "I'll sell today and rent for a while. Prices
are sure to come down." There are flaws to this logic.
Prices only drop in a sustained buyer's market. We've been in a strong seller's market for a long time and for prices to
drop, we need to first shift to a balance market and then move into a buyer's market for an extended period of time.
In 2005 when we had the crash it took 8 months to move from a seller's market to a balanced market and prices
continued to increase during that time. And then it took 3 more months to move into a buyer's market and 8 more
months to see prices impacted and we're in a market today that's significantly hotter than it was in 2005. Waiting
today may mean waiting for a year or two... or three for prices to drop. While you're waiting, you're paying rent, not
building equity, not claiming the potential tax advantages of home ownership and dealing with rising rental rates. the
shortage of housing in the Valley is not going away - more people are moving here than other city in the country at an
increasing rate, driving up demand and prices for rentals and purchases. Waiting to sell and buy will most likely cost
you money.
As a buyer, it may be frustrating finding a property in this very strong seller's market. But when you do, your equity
growth begins almost immediately. Real estate is the best way to build wealth and waiting to buy will cost you
money as well.
Whether you're waiting to buy or waiting to sell, waiting will most likely cost you money.
There are strategies to WIN in this market and I can help you do that. Just give me a call. I am John Schloz with HomeSmart
Luxury Market is Setting Records
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Valley wide, Real Estate Sales volume year to date, through October has exceeded 32 billion dollars. this is a record
for the valley and is over 14% higher than the sales volume last year at this time. And this is with virtually no increase in the number of sales.
But don't be misled- it's not all price increases. Yes, prices have significantly increased this year but the biggest surprise that is impacting the Valley's market is the mix of homes that have sold.
The Temps and Market is Hot!
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Hot in the Valley and the real estate market is even hotter. Inventory continues to be tight and buyers in all price range look to take advantage of historic low rates.
Read MoreNorth Scottsdale Opportunities
/North Scottsdale, 85255 and 85260, for the past few years has seen very little appreciation in the $800,000 to $1.5mil price range. Both 2019 and 2018 saw average price per foot in this category rise less than 2%. Year to date we have seen an increase of 6%. This trend will probably continue as inventory get tighter in the interior city. New working at home models and a renewed appreciation for not being on top of your neighbor will also keep raising prices. This area could be one of the value plays in 2020.
Luxury Homes Prices
/A common question I get is “Are luxury home sellers taking low ball offers because of the pandemic?” From the data we we see that asking prices and the prices that luxury homes (Homes over $1mil) sell has remained fairly constant. Luxury home values have been protected by the lack of supply. There are luxury home owners wanting to make a move. However, many of these potential sellers have postponed making a move. Luxury buyers coming into the valley are finding fewer options to choose from.
Rents continue to rise
/Rents continue to rise through these market conditions. With low interest rates renters may want to consider putting that money to work for them in a home of their own. Investors may want to take stock of their rental units. Now is a great time to liquidate sub prime locations and units with deferred maintenance.
May's Market Update Video
/Timing is everything in the real estate market. And if you're curious about the market, by the time you read the newspapers or economic websites, the market has already changed.
This is John Schloz, with your monthly, Phoenix area, real estate market update. During the 6 week period from the beginning of the coronavirus shutdown to mid April, contract activity in the valley dropped 39%. You may beginning to see news stories about a decline in sales - because most escrows take 30 - 45 days to close. This drop in activity is old news. What's not getting reported - yet - is the 49% increase in accepted contracts over the last 5 weeks.
This is key information for buyers right now, especially if they’re on the fence waiting for the market to “crash”. This increase in buyer demand will not be widely reported for another month because these contracts still need to close.
One mistake buyers make is waiting for closing reports before acting. By the time a property closes escrow and the sales price is publicly recorded, the conditions that the transaction was created under may have already passed. That's why working with a Trusted Advisor, who stays current on real market conditions, is so important. Because we watch real time data.
We know that contract activity is up across all price points in Greater Phoenix, but the average list price per square foot is only down on contracts over $500K. All other price points below $500K are seeing the average list price per square foot either higher than or equivalent to where it was 10 weeks ago in February. This does not indicate an impending doom for home values.
Buyers waiting for sale prices to decline are truly missing out. Mortgage rates have declined while the median sales price rose 8.9% over last year, but it works it to a net gain for buyers. The principal and interest payment on a $300K, 30-year, fixed-rate mortgage went from $1,450/month to $1,307/month. That’s down a 10% decline over the course of a year.
The drop in market activity has impacted seller's only slightly. We're not seeing significant price drops but we are seeing sellers making more concessions to buyers with the percentage of homes closing with seller-assisted closing costs, increasing from 18% to 25% over the last 4 weeks.
When you want to know what's really happening in the market with up to date information - before you read it online, reach out to your Trusted Real Estate Advisor. And that's me: John Schloz HomeSmart
Affected Home's asking price, per square foot
/What sellers have been asking for their homes under $500,000 seems untouched by Covid 19. With only one small dip the asking prices per foot have continued to rise. The rise in price per foot in 2020 has out paced both 2018 and 2019 year over year increases.
$500,000-$1,000,000 has also seen a healthy increase of 3% in asking price per foot in 2020. The $1,000,000 and above is slightly up since the beginning of the year but still off its peak in 2020. The luxury market was hit at its peak season and is our city’s most seasonal real estate market. We will see if those buyers travel a bit less this summer and do a little home shopping.
