Phoenix Buyers Have the Advantage Heading Into Year-End

For two years, buyers across Greater Phoenix have heard that mortgage rates are about to drop, and for two years, they haven’t. While everyone has been watching rates, the market has shifted, and buyers have a better option today than they’ve had in a long time. After 40 years in real estate, I can tell you there may never be a better time to buy than right now.

Inventory is up, and demand is down. There are almost 28,000 active homes on the market in the Phoenix metropolitan area today, up 6.8% from the same time last year. At the same time, the number of homes that went under contract in the last 30 days is down 13%.

Only about 5,155 homes closed last month, almost 10% fewer than a year ago. Days on market are climbing toward 50. The average price has slipped 1.5% from this time last year, and the list price to sales price ratio has weakened a little too.

When you have high supply and low demand, sellers have to be motivated to get their homes sold. We’re heading into November and December, historically the slowest months of the year, and I expect sellers to be more motivated than they’ve been all year.

Sellers are paying toward buyers’ costs. I recently looked at several markets around the Valley, and one ZIP code stood out. In 85303, sellers were paying concessions toward the buyer on almost 100% of the homes under $600,000, somewhere between $8,000 and $12,000 each.

That’s about $10,000 sellers are giving buyers as an incentive to buy down their interest rate or cover other costs. Sellers are willing to negotiate better than we’ve seen in the past, and buyers are in a better position to make an offer.

Start with a lender appointment. If you don’t already have a lender, feel free to reach out to me. I’m happy to refer you to some of the top lenders in the Valley.

The right price beats a lower rate. Say you’re buying a $400,000 house and financing $360,000. A one-tenth-of-a-point difference in your interest rate works out to about $25 a month.

If you’re buying at 7.4% and holding out for the rate to fall two-tenths of a point, you’re waiting to save about $50 a month. The real key is getting the house at the right price and negotiating in your favor. You can always refinance later if rates come down to 6% or below.

Today’s rates are historically normal. In my 40 years in real estate, I can tell you a 7.4% to 7.5% rate is what the average has been over the last 50 years. We were spoiled in the few years before rates went up. Until those few years, 3%, 4%, and 5% rates were something I’d never seen in my real estate career, and we’ll probably never see them again.

Quit waiting and act now. There’s more inventory to choose from today, and there are more motivated sellers willing to help you buy. The interest rate is something you can change later if you need to.

If you’re thinking about buying, right now is a good time to get off the fence, get yourself a new Christmas present, and buy a house. To find the right home at the right price or get connected with a great lender, call me at 602-430-5226, email me at natem@remax.net, or visit asknatemartinez.com. I’d love to help you find yours.