Central Phoenix is a Buyer’s Market
Central Phoenix is a buyer’s market and now that the mercury is falling it makes it a great time to make that move! In December of 2013, the Phoenix Metro area officially became a buyer’s market. What is a Buyer’s Market? Simply put a buyer’s market is when home buyer’s have a slight advantage over home sellers because inventory is outpacing demand.
Increasing Inventory and Declining Demand
In the Phoenix market, although inventory is outpacing demand, new listing have actually declined by approximately 10% from 2013 and those levels were. The 2013 levels of new listings were also down from 2012. The reason for these lower levels were the fact that foreclosures and short sales listings were going down dramatically. Couple that with the moderate but steady gains in value and it is great news!
However, lower distressed inventory levels and increasing prices have substantially decreased investor appetite in Central Phoenix as well as the entire metro area and have been a major contributor to the declining demand. Another factor often cited is the lower participation rate of first time home buyers. Interestingly, many first time home buyers who tried to enter the market in 2011 and 2012 say they decided to continue renting after being unable to compete with the multitude of cash infused investors who were gobbling up the foreclosure and short sale inventory. And the the elephant in the room, home lending’s more stringent qualification certainly contributed to the declining demand. Ironically, even former Federal Reserve chairman Ben Bernanke said he had been turned down trying to refinance his mortgage. “I recently tried to refinance my mortgage and I was unsuccessful in doing so,” said Bernanke. “I’m not making this up.” So, what does is all mean for you? Well in this article we will discuss what that means for buyers and sellers. We will also discuss some of the basic programs available in home lending.
Buyers Advantage – How to Benefit in a Buyer’s Market
Now is a great time for those who were sitting out the investor buying frenzy to re-enter the market and actually realize their dream of finding that perfect home. Inventory is up and although prices are a bit higher than those while the market was more distressed, the quality of homes is also up. The investors may have gobbled up what seemed like too good to be true pricing, but they also poured a good amount of money into the homes they “flipped” and that has contributed to revitalizing many neighborhoods. The Central Phoenix area is a great example of the impact made by investor flips and the NSP program that both arose out the ashes of the housing market crash.
In reality if one really looks at the market then and now, now is a really better time to make a purchase for the average buyer. The overall quality of the neighborhoods has increased from the crash and the sellers are much easier to deal with. One can find a nice home for a fair price and can expect to acquire it better condition and complete your purchase transaction in a reasonable amount of time.
Selling Your Home in a Buyer’s Market
Selling your home in a buyers market does not mean you must give away the farm. However, it does mean that as the seller you should have reasonable expectations. In a buyers market, you should not expect to get multiple offers starting above asking price. You should expect and not be offended if offers start at or slightly below asking price, it does not mean you must accept an offer below asking price it is simply the starting point for negotiating. You can also expect that a prospective buyer is going to want to things in disrepair to be repaired or a concession to render the repair them self post-close. Many sellers actually find an overall advantage in a slight tip in the market to the buyer’s side. They themselves are often times selling and then buying either downsizing or buying up and feel they can obtain a fair price selling their home and re-purchase at a fair price as well.
In 2014, unlike 2010, 2011, and 2012 purchases backed by a home loan account for more than 60% of transactions. Obtaining a home loan in 2014, is certainly a more tedious process than it was in the years prior to the housing market collapse as we heard from former Fed Chairman Ben Bernanke. But, according to new HUD secretary, Julian Castro, in his first major address at the Bipartisan Policy Center’s housing summit, “The truth is that the dream of home-ownership is out of reach for too many Americans. This has to change. Some believe it was too easy to get a home loan. Today it’s too hard. The pendulum has swung too far in the other direction.”
There are still many familiar products available, with a bit more stringent guidelines. VA still offers veterans looking for a primary residence a zero down home loan up to $417,000.00 for those who qualify and FHA still offers loans for as little as 3.5% down up to $271,050.00. for those who qualify. Conventional financing options from Freddie Mac and Fannie can be obtained up to $417,000.00 with as little as 5% down, provided the borrower and home both qualify. And jumbo loans, those over $417,000.00 to 1,00,000.00 can be obtained for as little as 20% down and 25% down for jumbo loans over 1,000,000.00, of course for those who qualify.
Hire a Professional
Whether you are buying or selling a home one thing is for sure, you should certainly hire an expert in the market to help them to obtain the very best value. Roberta Candelaria has been offering unparalleled client care, world-class sales and marketing solutions, professional negotiation techniques, and the detailed knowledge of the Central Phoenix real estate market needed to ensure success. Contact Roberta Candelaria today if you want to work with the best in Central Phoenix.