Every week I post that the market has hit an all-time high and then I have the same message the next week (we are currently at a 358.6 index, during the crazy boom the highest was 312.3). The market is definitely not sustainable but it won't be a crash. [Image 1] Note that every time there is a dip in the market (or crash) that appreciation will still be rising as the market index number starts to decline [highlighted in yellow].
If I had a hundred bucks for every time I have heard a Buyer was waiting until after the election, I'd have .. at least a very nice dinner for a lot of people.
Politics definitely have the ability to change a lot of things but the real estate market is not one of them. Policies like raising interest rates would absolutely stifle the market but that has not been discussed by any politician on any side. Biden did briefly talk about a $15K first-time home buyer credit but if that is implemented it will make it an even stronger Seller's market in the Greater Phoenix Metro area. Not a good thing for anyone honestly. We have a ton of demand already and no it's not just because 'all the Californians' that are moving here.
Millennials are FINALLY in the game and they have been saving their money! It's not unusual to see Buyer's under 30 with their own money for 20% down, their own closing costs (another 4-5%) and additional cash to sometimes get in the highest bid. This generation of home buyers want what they want and they are willing to pay for it.
Mortgage rates hit an even lower number this week. How is that even possible?! Well, it WAS predicted a long time ago that that is what would happen. Not by much but when we were at 2.80%, how much could it really go down?!
Prices will continue to rise. Period. It's basic economics, when they are higher demand for an item and limited supply, buyers are willing to pay more. Fortunately it's not completely out of whack with our job growth and the high-dollar incomes that are coming with those new jobs. These are national numbers. You can expect double these numbers for Greater Phoenix for 2021.
CoreLogic also loves to scare the consumer. They keep saying the crash is coming. Now I will say this.... IF, and I do mean IF interest rates do start to head in the upward motion, that SHOULD slow the appreciation rate down to the appreciation rates that are note above. Higher interest rates, even marginally, will mean that more people will be pushed out of their current price range and decide to not purchase. This is also why you are seeing more and more high-density apartments being built by the masses. The one thing we do want to keep an close eye on is affordability and with the last quarter numbers jut released, we are doing better than the national average.
Oh ya, you keep hearing about that word FORBEARANCE = FORECLOSURE... maybe in other states, but not in Arizona. Ivy Zelman, CEO of Zelman & Associates and a highly-regarded expert in housing and housing-related industries, was very firm in a podcast last week:
“The likelihood of us having a foreclosure crisis again is about zero percent.”
With demand high, supply low, and little risk of a foreclosure crisis, home prices will continue to appreciate.
Bottom line... no more excuses.
GOARIZONA REAL ESTATE
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Sheryl Willis, Go Chandler and eXp Realty does not engage in or condone activities which illegally discriminate on the basis of race, color, religion, sex, age, national origin, disability, familial status or any other protected classification under federal or state law.