The best way to describe the real estate market of the past few months was anemic. Inventory was high, rates were high, and demand was historically low. However, after Labor Day, we felt a significant pivot that will benefit both buyers and sellers.
In early September, there was strong confidence brewing that the Fed would drop rates and, on Sept. 17, the Fed finally issued their first rate cut of the year. Mortgage rates led the Fed cuts and dropped to year lows. In fact, at the time this article was written, mortgage rates had already dropped half a point. Secondly, inventory also started to come down, not because properties sold, but rather because many sellers removed their homes from the market because they were not selling.
After a long market slump, it definitely feels like we have passed the bottom and things are improving. A few weeks ago, showing values increased and we once again saw multiple offers on several properties. The local Cromford Market Index is also showing that real estate confidence has consistently increased week after week since the end of July.
SO, WHAT DOES THIS ALL MEAN FOR BUYERS AND SELLERS?
Right now, we are in a sweet spot for buyers. Buyers can still be aggressive on some properties, and the lower rates are making it possible for buyers to qualify for a bit more house or enjoy a lower payment. If rates continue to drop, even more buyers will come to market, but then there will be less leverage for the buyers in the pool. As this typically works, consumer confidence drives more consumer confidence – and suddenly no one wants to miss out.
Many sellers suffered from fatigue this year as homes took longer to sell and buyers had more negotiation power. However, if you have been trying to sell, don’t despair! The rate drop should get more buyers off the fence, expand the pool of active buyers, and get homes moving again. For sellers who dial in their homes and price correctly, there is an even greater opportunity for success. The details definitely matter in this market.
But whether you are buying or selling, the key is to be prepared and ready for the opportunities that are coming your way. While historically in the Phoenix market the back half of the year is not as strong for real estate sales as the first half of the year, it looks like we may buck the curve this year.
We have so many positive indicators that it is only a matter of time before the market heats up again. More millionaires are moving to the Valley of the Sun than to any other market.
Mesa was just ranked one of the top 10 best cities to live in nationwide, and the Phoenix Metro area is among the top 10 cities nationwide for economic growth. The growth is here, the foundation is solid, and the proof is here.
Whether you are buying or selling, the key is to be prepared, educated, and ready for the opportunities that are coming your way. We would love to help you build a strategy for success, so call us today for your complimentary consultation at (602) 615-0843. We have decades of experience and insight to answer your questions!