In June, the Phoenix real estate market saw a big shift that signaled a cooling trend and as we move through the summer months and into fall, so far, the trend has held.
The latest numbers from The Cromford Report, which provides detailed information tracking the history and current status of the Greater Phoenix residential resale market, shows the fastest cooling trend the area’s housing market has ever experienced is underway.
The number of new listings added to the ARMLS database over the past 28 days is 12,476. This is significant because it’s the highest number added in any 28-day period since the Report started measuring this statistic in 2011. The long-term average is 8,845, which equates to 41 percent more new supply than average.
So, what does this mean for Valley buyers and sellers? We spoke with three North Central real estate agents, with more than 70 years of experience among them, to get their take.
Trevor Halpern, who has been in real estate since 2011 and is CEO of Phoenix-based Halpern Residential at North&Co., said that “nationally and specifically in Phoenix, supply and demand are way out of whack. We are not building enough homes for the demand in the marketplace, both in Phoenix in general and specifically in North Central.”
Bobby Lieb, associate broker with HomeSmart Realty, has seen a lot of change during his 30-plus years in real estate. But the market of the last year has been one of the craziest he has ever seen, and the current cooldown is welcomed.
“The inventory has gone from approximately 4,000 active homes to almost 15,000 currently,” Lieb said. “So, it is no longer a 100-percent seller’s market. It really is starting to level out and that is OK with me because it was starting to get out of hand.”
Most see the current cool off as a much-needed stabilization, which is a good thing for everybody, says Phil Geretti, designated broker and owner of Highland Real Estate.
“We’re still definitely in a seller’s market. But the way the appreciation was going on houses, 25 to 30 percent in some areas a year, is just not sustainable. It makes it a more level playing ground for buyers and sellers.”
“I think we got a little bit spoiled, with rates being so low. But right now, this is where they traditionally are.”
For many in the Phoenix area looking at purchasing their first home, the “$30,000 question” says Halpern, is will home prices go back down or will they remain high?
“Those who are thinking that we may see a dip in prices, most of their outlook on that is that it will be a small dip and it’s going to be short term. As soon as the Fed gets inflation under control, if interest rates go back down, we are anticipating buyer demand to pick back up and prices to continue to rise.”
Buyers do still have a lot of options.
“One of the talking points that we’re using with our buyers is to say, ‘Look, capture today’s price. Because long term, they’re anticipated to continue to go up,” Halpern said. “Capture today’s price and then when interest rates go back down, shop for tomorrow’s interest rate.”
“I’d look at this as a good thing. I mean buyers have more selection; they have more power. It’s not going to be all one way,” said Geretti. “They might even get some credits and they might even be able to buy down rates.”
“My advice to buyers is, the values now are starting to favor you; make your move now while the going is good,” added Lieb.
And for those who are thinking of selling, all three agents say that expectations may need tempered.
“If you are really a realistic seller, forget about what values were six months ago and price your home to where the current values are now. You don’t want your home to linger and use up a lot of days on the market,” Lieb said.
“Paint, maybe do some landscaping, stage the property. In some cases, they might have to do price reductions. Sellers are going to have to price the homes correctly. This day of saying, ‘Hey, I can get $100,000 over…’ that’s not going to happen,” said Geretti.
At the end of the day, as the real estate market continues its roller coaster ride, getting help from the experts may be the soundest investment that both buyers and sellers can make.