A Modern Guide to Home Buying

For those of you that have been waiting for the market to crash to buy or invest in real estate, well . . . put your seat belt on the brakes are being applied and the vehicle could be coming to a halt. Only problem is, While you have been waiting for housing prices to drop, interest rates have been rising at a rapid rate and that house you thought you could get cheap, is going to cost you as much if not more in the long run.

Area Real Estate analyst Michael Orr, producer of The Cromford Report,  just came out with the latest housing statistics showing a change in the wind direction.

The good news is, eight hundred to nine hundred new homes have come onto the market each week since March of this year. As of March 11, there were 4,820 homes in ARMLS listed for sale. Today, June 16, there are 12,686 listed in ARMLS.  That’s almost a 138% increase in inventory since March. This is a much needed break from the lack of inventory we have been experiencing for the past 2 years.  Buyers now have more homes to choose from, they may possibly be the only offer on a home or at least be competing with fewer offers depending on the location and may now have more negotiating power when making an offer.

Bad news is, while inventory is up so are interest rates. Sadly, salaries here in Arizona have not gone up as rapidly as housing prices which means even though home prices may be stabilizing or even dropping some, the average home buyer has been priced out of the marke due to the higher monthly payments created due to the increase in interest rates.

So what does this all mean? Housing prices may finally be stabilizing some and maybe even dropping a bit. But as per the Cromford report, Arizona is still in a Sellers market which means at least for now, you won’t be seeing a significant price drop or what a lot of you investors are looking for, an uptick in foreclosures. Home Owners for the most part, due to a tightening in lending practices of the past decade are not over borrowed on their homes and should they need to sell, while it may take a bit longer than the craziness of the past two years, like 7 days rather than 3, Home Owners still can sell there homes for more than what they paid for it.  For Buyers, if you have not yet been priced out of the market, but just gave up due to lack of inventory, you may want to consider jumping back in. . . Like today.

Cromford predicts we will be in a stable market by August. After that, who knows what will happen. No one can predict the future we can only speculate based on current conditions and past trends.

My best advice for Buyers is, find a good lender and get prequalified. Lenders are on top of the interest rates daily and can help you make the best decision for your financial situation.

If you are trying to sell or need to sell, I always say, don’t be greedy. The biggest mistake Home Sellers made in 2008 when the market started crashing was thinking there home was still worth what it was in 2005. My motto is, a home will sell for the highest price someone is willing to pay for it. Not one penny more. If you price it too high, it’s only going to sit on the market because nobody, is going to pay more than they think a house is worth. Especially now.