Phoenix Housing Market Update

Most recently, prices have begun to stabilize and there are fewer mortgage applications being received. This lower number may be, in part, because so many homes have sold for cash. The number of available homes is still inadequate but competition may not be so intense. Economists are indicating a trend toward leveling off. There is still no indication the “bubble” is bursting. A market crash equivalent to the last bust is unlikely according to the experts.

Home prices are still up over last year by more than 13% on average. With many potential buyers now priced out of the market, a serious shortage of properties and fear over the market collapsing, it seems the mania may be halting ever so slightly. If bidding wars slow, many will be able to return to their search and compete for homes at sensible prices.

Meanwhile, fewer buyers are getting mortgages to buy homes.

The Mortgage Bankers Association survey of lenders confirmed the drop in mortgage requests. Refinances were also down.

Will Home Prices Go Down?

While none of the analysts believe that prices are likely to go down, many think the growth will moderate. They believe that the current median price growth cannot be supported at double digit rates. It seems that prices are not likely to go down as long as demand outruns supply. There is still a surplus of buyers and builders are unable to build fast enough to make much difference in that arena. Exacerbating this demand for hew houses are the low mortgage rates. The conclusion seems to be that buyers are not going to find “deals” anytime soon, but night face fewer offers.

Sellers will most likely keep prices up since others around them have sold homes for exorbitant prices. They will then hold out for higher prices and take advantage of the bidding wars going on recently.

Why The Easing?

There could be a number of factors at play in the softening of the market. Some are obvious while others are guesswork to some degree. Here are a few reasons for the current leveling off.

• Fewer people will continue working from home and return to office life
• Some may not decide to move farther out because of longer commuting times
• Kids returning to school

The reopening of America has put the focus on other life issues such as sporting events, going on vacation and many other daily life routines that are returning. It is certainly true that first time buyers and VA buyers have been sent home to wait due to restrictions of budget and requirements. Other buyers are frustrated at the lack of properties and the ridiculous prices being demanded by sellers.

Many people remember the last housing bust and accompanying recession and see the current market as setting up a copy pattern. People understand that buying at market peaks can lead to equity loss if the market readjusts downward or busts altogether. The current demand is so large that this may not end as it has in the past.

Conclusion:

A realistic Phoenix Housing Market Update would conclude the following. Most people inside the real estate world feel that the next serious change will not come until interest rates jump much higher. At this time, around 3% is still available on 30 year mortgages.

Those interested in locking down a home will need a quality local agent and get the process started ahead of their desired moving schedule. If you’re interested in Phoenix, Chandler or East Valley homes, you can’t do better than a native of the area looking on your behalf. Call Penney Mullins and find old fashioned customer service that is so rare today.