June 15-June 16

Greetings Weekend Warriors! 

It's the weekend (and Father's Day, too!) - so you know what that means?! Time to unwind, recharge, celebrate those special guys in your life and maybe even... find your dream home (between grilling, swimming and sports of course)!

This week's newsletter is packed with exciting real estate news, including:

• Hot Listings: Get a sneak peek at some of the hottest properties that just hit the market this week. 
• Local Market Insights: Stay informed with the latest trends in the East Valley real estate market. We'll delve into recent sales data, price fluctuations, and what it means for buyers and sellers.
• Popular local events: Looking for something to do for Father's Day, we've got your weekend round up in our favorite East Valley cities!

So grab a cup of coffee (or your favorite beverage!), settle in, and get ready to explore the exciting world of real estate right here in Arizona

Don't forget: If you have any questions or are ready to start your home search, we're here to help! Reach out to us today for a free consultation.

Price Negotiations and Concessions are Hot and Heavy this June

It’s feeling a bit like the movie “Groundhog Day” in the Greater Phoenix housing market as we relive the same scenario over and over. The Federal Reserve met this month and once again opted not to reduce the Federal Funds Rate, keeping it steady now for 12 months in a row. On the same day, the Consumer Price Index was released showing the annual inflation rate declined to 3.3%. The combination resulted in conventional mortgage rates dropping from an average of 7.16% to 6.98% in one day. This was expected, however the Federal Reserve board announced they anticipate one rate cut this year, possibly in September. That could mean a mortgage rate drop in late summer, if we dare hope.

While the drop is positive for buyers, rates are still too high to expect a major boost in demand at this stage. Sluggish demand combined with supply that’s 54% higher than last year is creating an environment for buyers that hasn’t been this accommodating in 10 years. Price negotiations are ramping up, but they look different depending on the price range.

On paper, price negotiations in the mid-range between $300,000-$500,000 look similar to last year, landing around 98.7% of asking price, down from 99.0%. This equates to a closing price about $5,200 lower on a $400,000 home compared to $4,000 lower last year. What’s not reported in the media is the rising percentage and cost of seller incentives to the buyer. In this price point, the majority of buyers are sensitive to their monthly cash flow more than the final sales price. Therefore, 55% of sales are closing with seller incentives to supplement buyers’ payments temporarily, compared to 49% last June. 

While the industry hopes for lower mortgage rates in the latter half of 2024, active sellers can only address where the market stands presently, which is a challenge. Supply has been rising all year long, but has slowed its roll over the past 3 weeks. Seasonally, supply fluctuations level out in the summer before picking up again around late September and early October. The increase in competition for sellers has resulted in 12 Greater Phoenix cities in less populated outer cities sinking into a balanced or buyer’s market over the course of 2 months, while 13 out of 17 seller’s market cities in the densely populated interior weakened.

Not-so-perfect listings, those that appear to have delayed maintenance issues, need excessive repairs, or simply don’t show well, have the most trouble in these environments. With so many other homes to choose from, these homes may not even get a showing in many area cities regardless of their attractive list prices.

Sellers haven’t seen a supply/demand ratio like this since about 2014-2015, so managing expectations and patience will be key to navigating a successful sale. Curious how you'll navigate this market? We can help!

😲 In Case You Missed It!