Arizona Real Estate Market Update August 31, 2020
Week #35 (August 24th-August 30th)
Hot words for 2020; New Normal, Pivot, Unprecedented, Wealthy Flight. Now Google 'Wealthy Flight' and then check out 'leaving' followed by any state (like 'leaving Portland'). If you had to take a guess, where do you think the people fleeing and leaving are going to?
No matter how you look at it, Arizona's real estate market is going to continue to be in high demand. Key word DEMAND. I've recently reported the highest Cromford Market Index numbers we have ever seen for the months of July and August. Economists will tell you that elections do not affect the real estate market but their policies do. No we, and I mean we from a country level, do not need Biden's $15,000 first-time homebuyer tax credit to stimulate the nation's Buyer demand. The nation's affordability rate is right where it needs to be with the extremely low interest rate. Let's leave real estate out of politics please...and politics out of real estate.
The Cromford Market Index continues to rise but it is rising at smaller increments. This would be a great place to insert emojis. Is that appropriate in a blog?!
We all know this can't last forever, it just cannot. Normal trends would start to level off right now and even show a slight decline in Buyer demand (not market values) as we approach year-end. Too many people hear the word 'decline' and think declining values. Not so.
The chart below shows us that even when the entire country was shut down (and everyone was panicked with market crash PTSD), the Arizona market did not even fall to a balanced market which needs to happen before prices start to decline.
I held an open house this past weekend that I am selling using an Online Bidding Platform, USAHomebids.com. We had a total of 350 Buyers through the house, so far we have over 30 bids on the home and the bidding goes until 6pm tomorrow night. There is no shortage of Buyers out there by any means.
The conversations I was having with so many Buyers was utter craziness. More than 50% of our guests said that they had agents that were not with them, unfortunate. I get it though. These are agents that are tired of chasing homes around with Buyers.
They also had stories of writing offers 10K, 20K and even 30K over list price and they had no idea why they did not get the homes. Do you know the reason?
The reason offers that are way over list price are not accepted is because they are so unrealistic, they are cast aside. It's not just about price but it is about numbers. The numbers just need to be in the right place and many agents do not know what this means exactly.
I am sure you will be surprised to see that although you hear rumors of homes selling for $25,000 over list price on the radio, on social media, your friend's friend... it's just not so. Here are the real numbers that are happening and where you do see the way over list price number, more often than not that is a new construction home (singular) were the Buyer spent more than the usual 15% in upgrades. Some of these Buyers were truly convinced that most homes were selling for as much as $50,000 over their list price. Just not true.
Here again is another reason you need to interview Realtors before selecting one to represent you in the biggest purchase of your life. Don't be compelled to use Aunt Suzy or your best friend that just got their license. Just because we all have the same license does not mean we have the same experience, the same skill sets or the same tools to get you the best deal possible.
Sheryl (Shey) Willis, CNE
GOARIZONA REAL ESTATE
Maricopa County Real Estate Special Commissioner
Zillow Premier Agent
Redfin Partner Agent
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