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Making Sense of the Phoenix Real Estate Market

Making Sense of the Phoenix Real Estate Market

As inventory drops below 9,900 and still is falling …

1) It’s becoming a cash market – given the choice between accepting cash or a financed offer, sellers are going to go with the cash nine times out of 10

2) Emotional appeals still work on equity sellers – given the choice between turning over the house where Billy grew up to another family or an investor, with all else (read: offer price) being equal, traditional sellers still seem to opt for the family.

3) It’s not the investors’ fault – no matter what the market condition, it seems like investors are the scapegoat. Here’s a quick reality check – when no one else was buying, when everyone else was waiting on the sidelines, the investors still were here looking for opportunities. They kept a declining market liquid. They’re part of the circle of life.

4) No one is out to get you – I heard from a Canadian recently who said our friends up north were being discriminated against because Fannie Mae and Freddie Mac have 15-day First Look period in which only owner occupants (or, in Freddie’s case, second home buyers) could purchase. This person’s twisted view was that the program was limited to allowing only American buyers for the first 15 days. Not at all true. And, in fact, one of my Canadian buyers purchase a First Look home.

5) Don’t overthink this – I’m already hearing there are no “values” or “deals” on the market anymore. Really? Have you happened to check the price levels out there versus 2003? 2004? Hell, 1978 in some areas?

There are exceptions to what’s written above. Retirement communities have not been as active, though that seems to be changing by the day as the selling season there comes to a close in a few weeks. Higher priced properties aren’t moving as quickly and cash deals disappear quickly once that sixth digit is added to the price.

But for the vast majority of buyers – those searching sub $100,000 or below $125,000 … stop searching for scapegoats, don’t waste time wishing the market were less active so prices could be driven down farther and accept the market for what it is.

Doing so is what makes the difference between someone who will buy and someone doomed to look and rent in perpetuity.

Photo credit: Ben Sutherland via Flickr Creative Commons

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