… if you didn’t receive a copy, here it is in all it’s thrilling detail:
Good afternoon! I hope this month’s Phoenix real estate update finds you and yours safe and well. This month’s update is going to be a lot like going to a buffet restaurant … we’ve got a little bit of something for everyone.
Canadian buyers: So the long-predicted return to par did occur, albeit for about 45 seconds or so. Which to some degree proves two things that I have said for some time – 1) Don’t count on par or better when your own government recognized such strength against the American dollar is bad for business back home; 2) Exchange rate risk can cost or save a Canadian buyer of real estate here in Phoenix far more than fluctuations in the market. The real estate market doesn’t move percentage points in a given day but the dollars do.
Still, the 92-93 cents we’re seeing now still compares favorably to a couple of years ago when the Canadian dollar had fallen from par back to 78 cents.
Today’s interactive section … one of my recent Canadian buyers tried to sign up for DirecTV but couldn’t provide the requisite social security number. The only workaround I’ve found is to skip DirecTV for Starchoice (which, if nothing else, gives you better curling coverage.) Anyone found another way around this one? Let me know.
Westbrook Village, Corte Bella, Pebblecreek, Ventana Lakes, et al: As predictable as the tides flowing in and out, inventory has fallen off fairly severely in all of the Phoenix area’s retirement communities. Two types of sellers remain on the market – those who are very motivated to sell and those who might be a bit stubborn in holding out for a set price in spite of the lowered activity.
This isn’t to say this is a bad time to shop for homes in these areas; to the contrary, if you can find the home that appeals to you it’s worth making the effort to purchase in hopes of finding a seller happy to sell unexpectedly in the summer months. But what you’re seeing now represents a small portion of what will be on the market two months hence.
First-time buyers: The $8,000 tax credit has expired and isn’t likely to return at any point in the near future. Only those who were under contract by April 30 and are waiting to close escrow still can take advantage.
I’ve argued in the past that it makes little sense to spend six figures based on the ability to get an $8,000 check. Of course, I also argue that when my wife buys extra makeup to get the free gift that the gift isn’t free and I lose that argument routinely.
Here’s the basic reality – interest rates remain historically low. Prices are more than a little depressed. Relatively low down payment financing still remains for those with somewhat decent credit. And in many parts of the Valley it’s cheaper to pay a mortgage than pay rent.
If you think your window of opportunity has closed just because of the loss of the tax credit, it may be worth having a conversation about your particular circumstances.
The Phoenix market overall: As of the moment there are 22,680 single family detached homes for sale in Maricopa County – roughly the same level we’ve seen for months. There were 6,838 closed sales in the month of June; more telling will be the numbers for July when the last-minute tax credit buys have filtered through the system.
Each city, each neighborhood is different than the others in the market but as a whole we still have the same low inventory and relatively strong demand that we have seen for the last 18 months. Prices haven’t followed suit, which provides an extended opportunity.
I often joke that my market is better than yours, whatever yours may be, if only because of the couple dozen potential buyers I speak to every day who are waiting for a home to sell elsewhere before they can move here. If the gridlock ever breaks a bit, it would be an interesting frenzy here.
Short sales: Processing times are getting a little shorter so if you’ve not looked at these in the past (most likely at my urging) the time’s coming where a second look may be in order.
And lastly: What has allowed my business to flourish in strong markets and in weak markets is you and the trust you’ve shown me by recommending your friends and family. Business this year has been strong but I’m never too busy for any of your referrals.
Until next time, be safe and we’ll talk to you soon.