PHOENIX (3TV/CBS 5) – It’s a brand new year and a brand new real estate market for 2023!
Estate agents across the valley expect more balance in the market with more room for negotiation for buyers and sellers. In the valley, there are approximately 17,400 homes on the market. This is the largest inventory we saw over the summer when the market was at its peak of just 3,500. In a “normal” market, there were an average of 35,000 homes for sale. Several real estate experts say the market is well positioned to welcome buyers, with interest rates at the top in 2023.
Sindy Ready, vice president of the Arizona Association of Realtors, said: ‘So we’ve kind of been in this place for a few years where interest rates were 3 to 3.5 and now they’re are at 7.5. Everyone’s kind of going ‘Woah! What’s going on with interest rates?’ “, did she say. “Yes, you can expect a lower interest rate, but then you’ll be competing with more people for the same homes, just like we were before.” Ready added that if buyers are concerned about rates, keep in mind that many sellers are willing to negotiate so you can lower your interest rate. She also said to remember that if this is your primary residence, the mortgage interest is tax deductible.
The Cromford Report, a real estate market tracker, said that overall the Phoenix market has returned to equilibrium. In December, 50% of closings closed with some form of buyer concession. This means everything from a repair or contribution to an interest rate buyout. Report associate Tina Tamboer said, “The outskirts of town, like areas like Maricopa, Casa Grande, Buckeye, you’re always going to see a buyer’s market. There are still very good deals to be had with builders,” she said. “But, some areas like Phoenix, Chandler and Glendale are in balanced markets – still very good for buyers. Then you have the northeast like Scottsdale, Fountain Hills, Cave Creek – these areas are always sellers markets. The luxury markets are therefore still doing very well.
Exorbitant interest rates seem to be coming down, at least a little. However, you might have a bit more bargaining power this year, experts say.
Inventory is an important part of the equation, according to Eric Gibbs, president of the Arizona Association of Realtors. He said overall the market is doing better with around 3 months supply of houses in the valley. Gibbs said: “Buyers are in the market. Buyers move. The problem for buyers is that they cannot find inventory. There is not a lot of inventory. If they’re looking for a home under $300,000, there may only be a few available to them, and so that’s what’s causing some of the slowdown in buyers’ purchases.
Economists from the National Association of Realtors predict mortgage rates will stabilize around 5.5% by the end of 2023. More businesses will move into the Valley this year, so experts say prices will likely reflect the surge in demand. Sindy Ready said: “Prices have come down slightly, around 4% in the last 6 months, and they say we’re going to be fairly stable where we are. Maybe another 1.1% is really what I saw with some speculation, so prices have kind of stabilized. Ready said that from a seller’s perspective, she recommends checking out what homes are selling for and being realistic. “You’re still going to make a big profit on your house, but it might not be what it would have been a year ago,” she said.
Ready suggests sellers make sure their home looks neat, clean, and furniture has been cleared up. “Photography is important. The appearance of the house… making sure any major repairs that need to be done are done,” she said. “The days of ‘I won’t do anything about this house and I’ll sell it’ are over.’ I mean, you can still do it, but you’re going to take a big price hit if you do.
Gibbs says many buyers are generational families looking for a bigger home. “The opening, they want the open floor plan with a good sized back yard,” he said. “The ability to really enjoy life and the community, to live in an area where they have everything they need without having to drive so far to get to stores and those accessible restaurants and things like that. “
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