My Monthly Market Summary • November 5, 2023

Phoenix Housing Market Update from Shawn with Coldwell Banker Realty

by Shawn Keane

The October jobs report came in at 150,000, below expectations of 180,000. It was a resilient but moderating job growth number that signifies easing wage pressure.

As a result, the 10-year Treasury bond surged like a meme stock, causing the 10-year yield to drop to about 4.56% from 4.9%. This move shows how quickly interest rates can come down and how quickly prices can get bid up once the market turns. The quick decline in the 10-year bond yield has me speculating of further declines in mortgage rates in 2024. The average 30-year fixed-rate mortgage declined from about 8% to 7.35% in under two weeks. That’s amazing, volatility for sure.

If mortgage rates do decline by another 1%+ (mid 6%) by Spring 2024 and the stock market stays around current levels or higher, I expect a lot of real estate demand to come off the sidelines and buy. At that time, if you identify a house you really want to buy, good luck getting it because everybody else will want it as well. Will this happen? I’m thinking it will.

Currently in this housing market we’re seeing more price reductions and cancellations. Inventory continues to build month to month and homes under contract continue to decline month to month, creating a more balanced market with sellers NOT having the “upper-hand”.

Market Summary for the Beginning of November

Here are the basics – the ARMLS numbers for October 1, 2023 compared with October 1, 2022 for all areas & types:

Active Listings: 15,247 versus 20,582 last year – down 26% – but up 14% from 13,404 last month
Under Contract Listings: 6,028 versus 6,578 last year – down 8.4% – and down 7.2% from 6,499 last month
Monthly Sales: 5,177 versus 5,420 last year – down 4.5% – and down 5.4% from 5,472 last month
Monthly Average Sales Price per Sq. Ft.: $295.19 versus $276.73 last year – up 6.7% – and up 3.4% from $285.40 last month
Monthly Median Sales Price: $435,000 versus $436,000 last year – down 0.2% – but up 0.7% from $432,000 last month

Mortgage rates rose yet further during October, peaking at an average of 8.03% on October 19 and remaining around 7.9% until the end of the month. This had a chilling effect on demand and the pending listing count dropped below 4,000, an unusually low level for the time of year. Monthly sales were also weak at 5,177, even lower than the poor level of a year ago.

New listings have been arriving at more normal levels over the past 3 months, leading to a rise in active listings, though we are still well below the levels we experienced 12 months ago. Rising supply and falling demand have led to a significant change in the state of the market and the seller’s market is quickly becoming more balanced, with a few areas becoming favorable to buyers instead. This has not been reflected in the average closed price per sq. ft. which shot up by 3.4% over the last month and is now 6.7% higher than a year ago. However, the median sales price is much less impressive, still slightly below last year’s level and up only 0.7% for the month.

An absence of pain can sometimes be experienced as pleasure, like when you stop banging your head against a wall. This principle applies to the Federal Reserve who decided NOT to raise the Federal Funds Rate at the start of November. The mortgage market had a huge party in response. The average 30-year fixed rate dropped from 7.88% on October 31 to 7.38% just 3 days later. The lower rates may possibly result in a recovery of demand during November, but the change was too late to be reflected in any of the numbers above.

Demand remains surprisingly robust in the new home market, which has benefited from the weak supply in the re-sale market. New home pricing has increased much faster than re-sale pricing as a result. Offering mortgage rate buy-downs has been an important factor is maintaining this demand.

We now must watch the demand numbers to see if buyers respond to rates under 7.5%. Source, Cromford Report

Arizona is ranked second among states where home prices are rising faster than wages. Arizona’s housing price and wage growth disparity over the last five years stands at 37.7%. The U.S. housing market is no stranger to volatility, and housing affordability continues to remain a significant concern for aspiring homeowners waiting on the sidelines as home prices rise and mortgage rates increase. Read the article here: Arizona ranks No. 2 among states where home prices are rising faster than wages – AZ Big Media

Go to my website for information and a special feature called “Neighborhood News” “the best way to stay connected to what’s happening in the real estate market in your area”. Also, you can search real time listings in any area of the market. Check it out and stay updated with my daily blog and monthly market report that I send out monthly. My Website–Find Your Dream Home

If you’re considering selling or buying, give me a call to discuss your situation and current market conditions.

The best compliment is a referral to your family and friends!

Shawn Keane
shawn.keane@azmoves.com

Cell: 602-989-3209

Uncategorized • November 5, 2023

Don’t Believe Everything You Read About Home Prices 11-2023

by Shawn Keane

Don’t Believe Everything You Read About Home Prices

According to the latest data from Fannie Mae, 23% of Americans still think home prices will go down over the next twelve months. But why do roughly 1 in 4 people feel that way?

It has a lot to do with all the negative talk about home prices over the past year. Since late 2022, the media has created a lot of fear about a price crash and those concerns are still lingering. You may be hearing people in your own life saying they’re worried about home prices or see on social media that some influencers are saying prices are going to come tumbling down.

If you’re someone who still thinks prices are going to fall, ask yourself this: Which is a more reliable place to get your information – clickbait headlines and social media or a trusted expert on the housing market?

The answer is simple. Listen to the professionals who specialize in residential real estate.

Here’s the latest data you can actually trust. Housing market experts acknowledge that nationally, prices did dip down slightly late last year, but that was short-lived. Data shows prices have already rebounded this year after that slight decline in 2022 (see graph below):

But it’s not just Fannie Mae that’s reporting this bounce back. Experts from across the industry are showing it in their data too. And that’s why so many forecasts now project home prices will net positive this year – not negative. The graph below helps prove this point with the latest forecasts from each organization:

What’s worth noting is that, just a few short weeks ago, the Fannie Mae forecast was for 3.9% appreciation in 2023. In the forecast that just came out, that projection was updated from 3.9% to 6.7% for the year. This increase goes to show just how confident experts are that home prices will net positive this year.

So, if you believe home prices are falling, it may be time to get your insights from the experts instead – and they’re saying prices aren’t falling, they’re climbing.

Bottom Line

There’s been a lot of misleading information about home prices over the past year. And that’s still having an impact on how people are feeling about the housing market today. But it’s best not to believe everything you hear or read.

If you want information you can trust, turn to the real estate experts. Their data shows home prices are on the way back up and will net positive for the year. If you have questions about what’s happening in our local area, let’s connect.

Uncategorized • November 1, 2023

A Real Estate Agent Helps Take the Fear Out of the Market

by Shawn Keane

A Real Estate Agent Helps Take the Fear Out of the Market

Do negative headlines and talk on social media have you feeling worried about the housing market? Maybe you’ve even seen or heard something lately that scares you and makes you wonder if you should still buy or sell a home right now.

Regrettably, when news in the media isn’t easy to understand, it can make people feel scared and unsure. Similarly, negative talk on social media spreads fast and creates fear. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

But it doesn’t have to be that way. Buying a home is a big decision, and it should be one you feel confident making. You should lean on a trusted real estate agent to help you separate fact from fiction and get the answers you need.

That agent will use their knowledge of what’s really happening with home prices, housing supply, expert forecasts, and more to give you the best possible advice. The National Association of Realtors (NAR) explains:

“. . . agents combat uncertainty and fear with a combination of historical perspective, training and facts.”

The right agent will help you figure out what’s going on at the national level and in your local area.

They’ll debunk headlines using data you can trust. Plus, they have in-depth knowledge of the industry and can provide context, so you know how current trends compare to the normal ebbs and flows in the housing market, historical data, and more.

Then, to make sure you have the full picture, an agent can tell you if your local area is following the national trend or if they’re seeing something different in your market. Together, you can use all that information to make the best possible decision.

After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where a trusted expert comes in.

Bottom Line

If you need reliable information about the housing market and expert advice about your own move, let’s connect.

Uncategorized • October 28, 2023

Unmasking Scary Myths about Today’s Housing Market Oct 2023

by Shawn Keane

Unmasking Scary Myths about Today’s Housing Market [INFOGRAPHIC]

Some Highlights

Here’s what you really need to know about a few myths causing fear in today’s housing market.
Despite common misconceptions, many people can buy a home even if they have student loans, home prices are rising nationally (not falling), and you usually don’t have to have 20% for a down payment.
If you have other fears or reservations about buying a home today, let’s connect so you have an expert to help clear those up.

Uncategorized • October 28, 2023

Affordable Homeownership Strategies for Gen Z 2023

by Shawn Keane

Affordable Homeownership Strategies for Gen Z

The idea of owning a home has always been a big part of the American Dream. It’s a symbol of stability, independence, and having a place to truly call your own. But for Gen Z, the “Zoomers” born between 1997 and 2012, making that dream a reality can feel like quite the challenge today with higher mortgage rates and rising home prices.

But achieving that goal of owning your first home can still be attainable, even today, with some strategic planning and resourcefulness.

Explore Down Payment Assistance Options

With prices rising all around you, it can be hard to save up for a home. If you’ve been struggling to stash away enough cash for that down payment, it’s worth it to look into the various down payment assistance programs available. These programs can really help you save big on the upfront costs of buying a home.

There are a lot more options out there than you may realize. According to Down Payment Resource, there are over 2,000 programs designed to help hopeful homebuyers with down payments and closing costs.

If you qualify for one of these programs, you may not need to save up as much money for your down payment. A local real estate agent can help you explore these programs in your area, making it much easier to turn your homeownership dream into a reality.

Consider Living with Relatives To Save

If you still need a bit more time to save, even with the down payment assistance programs out there, there are ways you can make that happen. Many savvy Zoomers have made a strategic choice to live with relatives so they can get to their savings goals even faster.

According to the National Association of Realtors (NAR), around 30% of Gen Z homebuyers transition directly from their relative’s home to a home of their own.

By sharing living costs, such as mortgage payments, utility bills, and even grocery expenses, you can substantially reduce your monthly expenses. This frees up more of your income to tackle any outstanding debt, boost your credit score, and reach your down payment target in less time. And, all of this can bring homeownership one step closer to becoming a reality. Clare Trapasso, Executive News Editor at Realtor.com, explains:

“Faced with ongoing housing affordability issues . . . we’re seeing parents and children becoming roommates again in later years as the ‘kids’ save up to purchase their own place . . .”

The Road to Homeownership

When you’re on the path to becoming a homeowner, it’s a good idea to get some help along the way. And one of your best resources on this journey as a young homebuyer is a trusted real estate agent. They’ll steer you through the process of buying a home and help you find one you can afford.

Bottom Line

For Gen Z, the path to homeownership may not be straightforward, but it’s still within reach. With the right strategies, you can turn your dream of owning a home into a reality.

Uncategorized • October 28, 2023

Invest in Yourself by Owning a Home 2023

by Shawn Keane

Invest in Yourself by Owning a Home

Are you wondering if it makes sense to buy a home right now? While today’s mortgage rates might seem a bit intimidating, here are two compelling reasons why it still may be a good time to become a homeowner.

Home Values Appreciate over Time

There’s been a lot of confusion around what’s happened with home prices over the past two years. While they did dip ever so slightly in late 2022, this year they’ve been appreciating at a more normal pace, which is good news for the housing market. And while looking at price movement over just a year or two can make you worry prices are usually this unpredictable, history shows in the long run, home values rise (see graph below):

Using data from the Federal Reserve for the past 60 years, you can see the overall trend is home prices have climbed quite steadily. Sure, there was an exception around the housing crash of 2008 that caused prices to break the usual trend for a time, but overall, home values have been consistently on the rise.

Increasing home values is one great reason why buying may make more sense than renting. As prices rise, and as you pay down your mortgage, you build equity. Over time, that growing equity gives your net worth a boost.

Rent Keeps Going Up Through the Years

Another reason you may want to consider buying a home instead of renting is the never-ending rent hike. If you’ve ever felt the pinch of rent increasing year after year, you’re not alone. That’s because, rents have climbed steadily over the past six decades (see graph below):

By buying a home, you can lock in your monthly housing costs and bid farewell to those pesky rent hikes. That stability is a game-changer.

In the end, it all boils down to this: your housing payments are an investment, and you’ve got a choice to make. Do you want to invest in yourself or your landlord?

By becoming a homeowner, you’re investing in your own future. When you rent, that’s money you never get back.

When you factor in home values consistently rising, plus the opportunity to get relief from never-ending rent hikes, homeownership can be a path to financial security. As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), states:

“If a homebuyer is financially stable, able to manage monthly mortgage costs and can handle the associated household maintenance expenses, then it makes sense to purchase a home.”

Bottom Line

When it comes down to it, buying a home offers more benefits than renting, even when mortgage rates are high. If you want to avoid increasing rents and take advantage of long-term home price appreciation, let’s connect to go over your options.

Mortgage Rates • October 16, 2023

Are Higher Mortgage Rates Here To Stay?

by Shawn Keane

Are Higher Mortgage Rates Here To Stay?

Mortgage rates have been back on the rise recently and that’s getting a lot of attention from the press. If you’ve been following the headlines, you may have even seen rates recently reached their highest level in over two decades (see graph below):

That can feel like a little bit of a gut punch if you’re thinking about making a move. If you’re wondering whether or not you should delay your plans, here’s what you really need to know.

How Higher Mortgage Rates Impact You

There’s no denying mortgage rates are higher right now than they were in recent years. And, when rates are up, that affects overall home affordability. It works like this. The higher the rate, the more expensive it is to borrow money when you buy a home. That’s because, as rates trend up, your monthly mortgage payment for your future home loan also increases.

Urban Institute explains how this is impacting buyers and sellers right now:

“When mortgage rates go up, monthly housing payments on new purchases also increase. For potential buyers, increased monthly payments can reduce the share of available affordable homes . . . Additionally, higher interest rates mean fewer homes on the market, as existing homeowners have an incentive to hold on to their home to keep their low interest rate.”

Basically, some people are deciding to put their plans on hold because of where mortgage rates are right now. But what you want to know is: is that a good strategy?

Where Will Mortgage Rates Go from Here?

If you’re eager for mortgage rates to drop, you’re not alone. A lot of people are waiting for that to happen. But here’s the thing. No one knows when it will. Even the experts can’t say with certainty what’s going to happen next.

Forecasts project rates will fall in the months ahead, but what the latest data says is that rates have been climbing lately. This disconnect shows just how tricky mortgage rates are to project.

The best advice for your move is this: don’t try to control what you can’t control. This includes trying to time the market or guess what the future holds for mortgage rates. As CBS News states:

“If you’re in the market for a new home, experts typically recommend focusing your search on the right home purchase — not the interest rate environment.”

Instead, work on building a team of skilled professionals, including a trusted lender and real estate agent, who can explain what’s happening in the market and what it means for you. If you need to move because you’re changing jobs, want to be closer to family, or are in the middle of another big life change, the right team can help you achieve your goal, even now.

Bottom Line

The best advice for your move is: don’t try to control what you can’t control – especially mortgage rates. Even the experts can’t say for certain where they’ll go from here. Instead, focus on building a team of trusted professionals who can keep you informed. When you’re ready to get the process started, let’s connect.

My Monthly Market Summary • October 6, 2023

Housing Market Summary for the Beginning of October 2023

by Shawn Keane

Housing Market Summary for the Beginning of October

Hello,

September’s spike in mortgage rates resulted in more buyers postponing their home searches.

We have a higher increase of new listings in September compared to August which is unusual, and this coincides with more price reductions on listings.

I still predict that home prices will be generally flat through the end of the year, however the risk of further price declines has increased. We need to see interest rates stabilize, come down and the Federal Reserve to signal to the markets that they are done increasing rates. Pent-up demand is there; however, affordability and 20-year high mortgage rates have priced many buyers out of the market. Shawn

Here are the basics – the ARMLS numbers for September 1, 2023 compared with September 1, 2022 for all areas & types:

Active Listings: 13,404 versus 20,084 last year – down 33% – but up 12% from 11,969 last month
Pending Listings: 4,264 versus 4,862 last year – down 12% – and down 7.4% from 4,604 last month
Under Contract Listings: 6,499 versus 7,358 last year – down 12% – and down 8.6% from 7,111 last month
Monthly Sales: 5,563 versus 6,460 last year – down 14% – and down 11% from 6,261 last month
Monthly Average Sales Price per Sq. Ft.: $285.08 versus $276.60 last year – up 3.1% – and up 1.1% from $281.99 last month
Monthly Median Sales Price: $432,000 versus $439,000 last year – down 1.6% – and down 0.7% from $435,000 last month

Mortgage rates 7.85% have hit their highest levels in 20 years and the impact on demand can be seen in the numbers. Listings under contract fell another 8.6% from the dismal level of last month. Closed sales were also disappointing, dropping another 11% from last month.

New listings remain scarce, but the flow has increased over the last 2 months. Demand is so poor that the active listing count is starting to build, up 12% over the last month. However, it remains well below last year at this time.

Price readings have something for everyone, with the average $/SF for closed listings up sharply and now over 3% higher than this time last year. However, the median sales price is 1.6% below last year and slightly lower than last month. This strange and unusual behavior is caused by pricing at the high end remaining stronger than it is at the low end.

The balance between supply and demand still favors sellers in the majority of markets, but negotiating power is swinging towards buyers with every day that passes. Supply rising and demand falling means this trend is gathering strength. If interest rates remain in the high sevens or increase further, then we can expect market balance to hit within 2 months or so. However, we usually see a significant weakening of supply from the middle of November to the end of the year and this could temper the downward direction in the Cromford® Market Index.

Demand remains much better in the new home market, though even here buyers will find it increasingly hard to qualify for loans if interest rates get closer to 8%.

A year ago, the market was looking very weak, and few people imagined that $/SF could possibly go up 3% in the following 12 months. This reinforces how unpredictable the market can be when looking more than a couple of months out. The best that can be done with math is a well-defined interpretation of the trend during the next 8 weeks or so. Right now these 8 weeks are not looking rosy. Just remember we felt the same way in October 2022.

Source: AZ Cromford Report

Check out my website which is full of information and a special feature called “Neighborhood News” “the best way to stay connected to what’s happening in the real estate market in your area”. Also, you can search real time listings in any area of the market. Check it out and stay updated with my daily blog and monthly market report that I send out monthly. My Website–Find Your Dream Home

If you’re considering selling or buying, give me a call to discuss your situation and current market conditions.

I love referrals! Please remember me! Thank you, Shawn, your realtor.

Uncategorized • September 14, 2023

Things to Consider When Buying a Home 9/2023 Fall Edition

by Shawn Keane

Things to Consider When Buying a Home

The process of buying a home can be overwhelming at times, but you don’t need to go through it alone. You may be wondering if now is a good time to buy a home … or if interest rates are projected to rise or fall. I put together a free eGuide for you that will answer many of your questions and likely bring up a few things you haven’t even thought about yet. Just click the button below to read it now!

Read Your Guide Now

Uncategorized • September 14, 2023

Things to Consider When Selling Your House 9/2023 Fall Edition

by Shawn Keane

Things to Consider When Selling Your House

It’s difficult to know when is the best time to sell, or how to get the most money for your house, but you don’t need to go through the process alone.

You may be wondering if prices are projected to rise or fall… or how much competition you may be facing in the market. I put together a free eGuide for you that will answer many of your questions and likely bring up a few things you haven’t even thought about yet. Just click the button below to read it now!

Read Your Guide Now