July 17 & 18

Welcome Back, Weekend Warriors! 

This is the Amy Jones Group's weekly newsletter, detailing local events, recent real estate news, and open houses.

This week, we're bringing you five fun-filled events happening around the Valley!

As the monsoons rev up to chase the afternoon sun, East Valley homeowners have got their eye on the storm as they watch interest rates fluctuate, inventory counts rise, and rapid appreciation give way to a shifting sellers market that proves to be as fun to watch as that time the neighbor's trampoline came flying over the wall. 

Who would have thought that in the year following the onset of a major global pandemic, we would be reporting some of the most astronomical gains in property values that the state has ever seen. Well, we did, kinda. Anyone who doesn’t credit hindsight being 2020 even a little probably has a head that won’t fit through the front door anymore, but there definitely have been clear signs that we’d be in a seller's market for a bit, and there’s been even clearer signs that we’re slowly making our way out of it for months now. 

If we take a look at some of the numbers here in the East Valley, you might be surprised to find that we actually have more inventory on the market than we did last quarter but still not quite as much as we had last year or even two years ago. We’ve had about a 10% increase in inventory since March which while still down 35% year over year, a significant improvement from our peak of more than 60% deficiency in inventory.

Meanwhile pending contracts have been declining for weeks now signifying some dampening of demand as skyrocketing prices cause some shell shock and the summer weather once again returns as a seasonal impact on the market. Days on market continue to fall as a reminder that houses are still selling, properties are still appreciating, and we are still in a seller’s market because there still are not enough homes for people to buy. 

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Even with faltering demand and the expected rise in inventory due to an end to the moratorium on evictions and the forbearances offered during the height of COVID-19, most sellers have an equity position of greater than $100K which has kept foreclosures to less than 1000 valley-wide as compared to 45,000 in 2009. Builders continue to adjust their selling strategies to capitalize on the 35% appreciation the resale market has seen after reporting just a 5% increase in new build median pricing over the Summer. Buyers who are expecting the bottom to fall out of the market because of a rash of short sales or an excess of new construction - will likely be sorely disappointed. 

There is no shortage of perspectives on the current housing market, but keeping an eye on the rate of new listings hitting the market and the percentage of houses that are listed that actually sell are going to be some of your best predictors for how long we’ll continue to see a rise in prices and multiple offers. We are already seeing the rate of showings going down, the number of offers declining, and a change in the concessions buyers are offering and sellers are expecting which is in-line with the fastest increase in listing counts since February of 2020 and a listing success rate in the 90's when average would be between 60%-70%.

While national news media sources will likely pickup on a decline in average dollar per square foot over the last few weeks, properties under $1M have continued to see an increase in their numbers topping $246.94 average list price per square foot this week - with overall valley numbers declining as the number of luxury listings typically bought and sold in the summer declines and their high dollar per square foot averages are pulled out of the total. This is why being in tune with your local market can help you avoid leaving money on the table and why working with a local professional ensures that  you aren’t getting a sales person, but rather a strategist who understands the options and can empower you to make the best decision for you and your family.

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The next few months will prove pivotal as we move from a frenzied seller’s market into more of a balanced market. Depending on the rate of new listings and the pace at which buyers return to the market understanding the potentially key opportunity they have to take advantage of more inventory and more negotiation room before interest rates rise, we could see a dramatic change in selling conditions by the end of the year. Remember, that more negotiation room and even more price reductions does not mean cheaper houses - that ship has sailed for now. It means that  while cities like San Francisco and New York struggle with affordability indexes in the teens, a family making the median income in Greater Phoenix can afford more than half of what is on the market today.

Just like the palo verde tree that didn’t make it through list night’s windstorm, however, there will be casualties of today’s market. House of Refuge CEO, Kayla Kolar, recently spoke with the national news media about the housing challenges many low income families face, "We do see families that come in that have never been in this situation before," she says. While there will continue to be opportunity for those that can take advantage of it, we’re asking the East Valley to ensure that no one is left behind. For more information on House of Refuge, Gilbert Chamber of Commerce 2021 Disaster Response Award Winner, and the work that they do - please visit www.houseofrefuge.org.

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