Selling • October 24, 2024

Planning To Sell Your House in 2025? Start Prepping Now

by Shawn Keane

Planning To Sell Your House in 2025? Start Prepping Now

If your goal is to sell your house in 2025, now’s the time to start prepping. Even though it might seem like there’s plenty of time between now and the new year, you should get a head start on any updates or repairs you want to make now. As Danielle Hale, Chief Economist at Realtor.com, says:

“ . . . now is the time to start thinking about what you need for your next home and then taking those steps to prepare to list . . . We have survey data that says 47 percent of sellers are taking longer than a month to get their home ready to sell, so getting them to start that process early can mean more flexibility.”

By starting your prep work early, you’ll give yourself plenty of time to get your house market-ready by the end of the year. But be sure to partner with a great agent before you get started, so you have expert insight into what repairs are worth it based on your local market.

Why Starting Early Is Key

To get the best price and sell quickly, it’s important that your home looks its best. And that means it’s up to you to make the necessary repairs, declutter, and even consider updates that could add value as part of getting your house ready to list.

By starting now, you can tackle things one task at a time. Whether it’s fixing that leaky faucet, refreshing your landscaping, or painting a room, getting an early start gives you the flexibility to do the job right and with as little stress as possible. Because, if you wait to knock items off your list later on, they could quickly stack up and get overwhelming. As Realtor.com explains:

“There are some important repairs to make before selling a house, so don’t be in too much of a hurry to get your home listed … if you move too fast, buyers see right through the fact that you skipped important home renovations. And this . . . might end up costing you time and money.”

What Should You Focus On?

Feeling motivated to start chipping away at that to-do list, but not sure where to start? Here’s a look at the most common improvements other sellers are making today (see graph below):

The Importance of Working with a Local Agent

And while that data gives you a starting point, it shouldn’t be seen as a comprehensive list. What buyers want in your area may be different, and only a local agent will have this in-depth understanding.

For example, if homes in your area are selling quickly with updated kitchens, your agent might suggest focusing on minor kitchen improvements rather than spending money on other areas that won’t offer as much return. They’ll also help you figure out if tackling larger projects, such as replacing your roof or upgrading your HVAC system, is worth it based on other recently sold homes. As Point says:

“Not all renovations are created equal, and focusing on upgrades that offer the highest potential for increasing your home’s value is key.”

And remember, it’s not just big-ticket items that can have an impact. Your agent will also speak to some of the smaller details – like cleaning up your yard, adding fresh mulch, or painting your front door – to make a real difference in how buyers feel about your home. This type of expert eye is crucial to help your house sell fast and for top dollar.

Bottom Line

Thinking of selling your house next year? Don’t wait until the last minute to get it ready. By getting a head start now, you can ensure everything is in place by the time the new year rolls around.

Need advice on what to tackle first? Let’s connect.

Mortgage Rates • October 24, 2024

What To Expect from Mortgage Rates and Home Prices in 2025

by Shawn Keane

What To Expect from Mortgage Rates and Home Prices in 2025

Curious about where the housing market is headed in 2025? The good news is that experts are offering some promising forecasts, especially when it comes to two key factors that directly affect your decisions: mortgage rates and home prices.

Whether you’re thinking of buying or selling, here’s a look at what the experts are saying and how it might impact your move.

Mortgage Rates Are Forecast To Come Down

One of the biggest factors likely affecting your plans is mortgage rates, and the forecast looks positive. After rising dramatically in recent years, experts project rates will ease slightly throughout the course of 2025 (see graph below):

While that decline won’t be a straight line down, the overall trend should continue over the next year. Expect a few bumps along the way, because the trajectory of rates will depend on new economic data and inflation numbers as they’re released. But don’t get too hung up on those blips and reactions from the market as they happen. Focus on the bigger picture.

Lower mortgage rates mean improving affordability. As rates come down, your monthly mortgage payment decreases, giving you more flexibility in what you can afford if you buy a home.

This shift will likely bring more buyers and sellers back into the market, though. As Charlie Dougherty, Director and Senior Economist at Wells Fargo, explains:

“Lower financing costs will likely boost demand by pulling affordability-crunched buyers off of the sidelines.”

As that happens, both inventory and competition among buyers will ramp back up. The takeaway? You can get ahead of that competition now. Lean on your agent to make sure you understand how the shifts in rates are impacting demand in your area.

Home Price Projections Show Modest Growth

While mortgage rates are expected to come down slightly, home prices are forecast to rise—but at a much more moderate pace than the market has seen in recent years.

Experts are saying home prices will grow by an average of about 2.5% nationally in 2025 (see graph below):

This is far more manageable than the rapid price increases of previous years, which saw double-digit percentage growth in some markets.

What’s behind this ongoing increase in prices? Again, it has to do with demand. As more buyers return to the market, demand will rise – but so will supply as sellers feel less rate-locked.

More buyers in markets with inventory that’s still below the norm will put upward pressure on prices. But with more homes likely to be listed, supply will help keep price growth in check. This means that while prices will rise, they’ll do so at a healthier, more sustainable pace.

Of course, these national trends may not reflect exactly what’s happening in your local market. Some areas might see faster price growth, while others could see slower gains. As Lance Lambert, Co-Founder of ResiClub, says:

“Even if the average national home price forecast for 2025 is correct, it’s possible that some regional housing markets could see mild home price declines, while some markets could still see elevated appreciation. That has been, after all, the case this year.”

Even the few markets that may see flat or slightly lower prices in 2025 have had so much appreciation in recent years – it may not have a big impact. That’s why it’s important to work with a local real estate expert who can give you a clear picture of what’s happening where you’re looking to buy or sell.

Bottom Line

With mortgage rates expected to ease and home prices projected to rise at a more moderate pace, 2025 is shaping up to be a more promising year for both buyers and sellers.

If you have any questions about how these trends might impact your plans, let’s connect. That way you’ve got someone to help you navigate the market and make the most of the opportunities ahead.

Uncategorized • October 6, 2024

Secrets To Selling Your House Quickly

by Shawn Keane

Secrets To Selling Your House Quickly

Seeing your house sit on the market without any bites is the ultimate frustration. And unfortunately, some sellers are in that tricky spot today.

According to data from the National Association of Realtors (NAR), the average time a house spends on the market has increased over the past few years (see graph below):

A recent post from Realtor.com notes a similar trend:

“During the week ending Sept. 14, homes stayed on the market eight days longer compared to last year. With more choices available and mortgage rates expected to fall, buyers are taking their time, which means sellers will need to be patient and flexible.”

Some of that is because inventory has gone up, so buyers have more options. And higher mortgage rates have definitely slowed demand over the past two years, and that’s out of your control. But here’s the secret. There’s something you can control – it’s also where those other sellers missed the mark. They didn’t work with the right agent.

Make no mistake, with the right strategy and agent partner, your house can still sell quickly, even today.

If time matters to you, you need to partner with an agent who understands this shifting market. That agent will be your go-to resource on what buyers are looking for right now, and how to position your home to hit the mark.

Here are just a few tips a great real estate agent will walk you through. They may seem simple, but advice like this can make all the difference.

1. Competitive Pricing: One of the most critical factors in selling your home quickly is setting the right price. A local real estate agent will do a competitive market analysis by reviewing recent sales and current listings for your area. Then, they’ll use that data to make sure your home is priced accurately for today’s market. This strategic pricing approach is the best way to make sure you’re hitting the sweet spot on price. If you don’t lean on an agent for this, it can really slow your process down. As U.S. News says:

“. . . setting an unrealistically high price with the idea that you can come down later doesn’t work in real estate . . . A home that’s overpriced in the beginning tends to stay on the market longer, even after the price is cut, because buyers think there must be something wrong with it.”

2. The Home’s Condition: Homes that are well maintained, have great curb appeal, and are updated with modern finishes tend to sell faster. So, if speed is a priority, make sure your house makes a great first impression. An agent is a key resource on what buyers will be looking for, if staging is worthwhile, and what repairs you need to tackle before you list. Ramsey Solutions offers this advice:

“In the spirit of selling your home fast, take care of things now that will be a problem in the closing process. Talk to your agent about fixes you’ll need to make to pass the home inspection, like: plumbing problems, roof damage, electrical issues, HVAC glitches. . . These are issues you’ll be expected to take care of before any buyers close on your house—you might as well get ahead of the game to help your home sell faster.”

3. Incentives and Extras: If you want to stand out from those other homes on the market, offering incentives or concessions, like help with closing costs, a home warranty, or including additional items (like appliances or furniture) with the sale can sweeten the deal for buyers. A real estate agent can suggest the right incentives to offer based on current market conditions and buyer expectations, so you can close the sale even faster.

Bottom Line

Selling a home quickly in a shifting market requires a strategic approach and an in-depth understanding of what buyers want. That’s why partnering with a local real estate agent is so important. As Forbes says:

“When time is of the essence, you can’t afford to take a chance on an inexperienced housing professional. Instead, you’ll want to work with a real estate agent who knows your market and has helped sellers in your situation before.”

Let’s connect to make sure you’re set up for success.

Markets • October 6, 2024

Home Values Rise Even as Median Prices Fall Oct 2024

by Shawn Keane

Home Values Rise Even as Median Prices Fall

Recent headlines have been buzzing about the median asking price of homes dropping compared to last year, and that’s sparked plenty of confusion. And as a buyer or seller, it’s easy to assume that means prices are coming down. But here’s the catch: those numbers don’t tell the full story.

Nationally, home values are actually rising, even if the median price is down a bit. Let’s break down what’s really happening so you can make sense of the market without getting caught up in the fear the headlines create.

Homes on the Market Right Now Are Smaller

The biggest reason for the dip in median price is the size of homes being sold. The median price reflects the middle point of all the homes for sale at any given time. And that’ll be affected by the mix of homes on the market.

To show you how this works, here’s a simple explanation of a median (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median (the middle one) is 10 cents. If you have two nickels and one dime, the median is now five cents.

In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change. The same is true for housing.

Right now, there’s a greater number of smaller, less expensive homes on the market, and that’s bringing the overall median price down. But that doesn’t mean home values are declining.

As Danielle Hale, Chief Economist at Realtor.com, explains:

“The share of inventory of smaller and more affordable homes has grown, which helps hold down the median price even as per-square-foot prices grow further.”

And here’s the data to prove it.

Price Per Square Foot Is Still Rising

One of the best ways to measure home values is by looking at the price per square foot. That’s because it shows how much you’re paying for the space inside the home.

The median asking price doesn’t take into account the size of different homes, so it may not always reflect the true value. And the latest national price per square foot data shows home values are still increasing, even though the median asking price has dropped (see graph below).

As Ralph McLaughlin, Senior Economist at Realtor.com, explains:

“When a change in the mix of inventory toward smaller homes is accounted for, the typical home listed this year has increased in asking price compared with last year.”

This means that while smaller homes are affecting the median price, the average home’s value is still rising. According to the Federal Housing Finance Agency (FHFA):

“Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.”

So, while headlines may make it sound like prices are crashing, you don’t have to worry. With a closer look and more reliable data, you can see that prices are still climbing nationally.

But it’s important to remember that home prices can vary by region. While national trends provide a big-picture view, local markets may be experiencing different conditions. A trusted agent is the best resource to explain what’s happening in your area.

Bottom Line

The decrease in median price is not the same as a decrease in home values. The median asking price is down mostly due to the mix of smaller, less expensive homes on the market.

The important thing to focus on is the price per square foot, which is a better indicator of overall market value—and those prices are still going up. If you have questions about what home prices are doing in our area, feel free to reach out.

Uncategorized • October 6, 2024

Don’t Fall for These Real Estate Agent Myths

by Shawn Keane

Don’t Fall for These Real Estate Agent Myths

When it’s time to buy or sell a home, one of the most important decisions you’ll make is who you’ll work with as your agent. That choice will have an impact on your entire experience and how smoothly it goes.

As you figure out who you’ll partner with, it’s important to know what to expect and what to look for. Unfortunately, there may be some myths holding you back from making the best decision possible. So, let’s take some time to address those, and make sure you have the information you need to find the right agent for you.

Myth #1: All Real Estate Agents Are the Same

You might think all agents are the same – so it doesn’t matter who you work with. But, in reality, agents have varying levels of experience, specialties, and market knowledge, which can have a big impact on your results. For example: you’ll get much better service and advice from someone who is a true expert in their field. As Business Insider explains:

“If you were planning to get your hair done for a special event, you’d want to visit a stylist who specifically has experience doing that type of work — you wouldn’t make an appointment with someone who primarily does kids’ hair. The same concept applies to finding a real estate agent. If you have a smaller budget, you probably don’t want to work with an agent who exclusively sells multimillion-dollar properties.”

Take some time to talk with each agent you’re considering. Ask about their experience level and what they specialize in. This will help you find the one that’s the best fit for your search.

Myth #2: You Can Save Money by Not Using an Agent

As a seller, you may think you can save money by not working with a pro. However, the expertise, negotiation skills, and market knowledge an agent provides generally saves you money and helps you avoid making costly mistakes. Without that guidance, you could find yourself doing something like overpricing your house. And that’s a misstep that’ll cost you when it sits on the market for far too long. That’s why U.S. News Real Estate says:

“When it comes to buying or selling your home, hiring a professional to guide you through the process can save you money and headaches. It pays to have someone on your side who’s well-versed in the nuances of the market and can help ensure you get the best possible deal.”

Myth #3: Agents Will Push You To Spend More

You may also be worried an agent will push you to buy a more expensive house in order to increase their commission. But that’s not how that should go. A good agent will respect your budget and work hard to find a home that truly fits your financial situation and needs. With their market know-how, they’ll point you toward the best option for you, rather than try to pad their own pockets on your dime. As NerdWallet explains:

“Among other things, a good buyer’s agent will find homes for sale. A buyer’s agent will help you understand the type of home you can afford in the current market, find listed homes that match your needs and price range, and then help you narrow the options to the properties worth considering.”

Myth #4: Market Conditions Are the Same Everywhere, So Why Do I Need a Pro?

Maybe you believe housing market conditions are the same no matter where you are. But that couldn’t be further from the truth. Real estate markets are highly localized, and conditions can vary widely from one area to another. This is why you can’t pick just anyone you find online. You should choose an agent who’s an expert on your specific local market. As a recent article from Bankrate says:

“Real estate is very localized, and you want someone who’s extremely knowledgeable about the market in your specific area.”

You’ll know you’ve found the right person when they can explain the national trends and how your area stacks up too. That way you’re guaranteed to get the full picture when you ask: “how’s the market?”

Bottom Line

Don’t let myths keep you from the expert guidance you deserve. With market knowledge and top resources, a trusted local real estate agent isn’t just helpful, they’re invaluable.

In what could be one of the biggest financial decisions of your life, having the right pro by your side is a game changer. Let’s connect and make sure you get the best outcome possible.

My Monthly Market Summary • October 6, 2024

Greater Phoenix Housing Market Update from Shawn with Coldwell Banker Realty

by Shawn Keane

Good evening,

As I stated in my mid-September update, I was seeing buyer traffic pick up, and wow, the September numbers certainly reflect that! What an improvement in under-contract/pending sales, best seen in the last five months! Read below for more info…..

Market Summary for the Beginning of October

Here are the basics – the ARMLS numbers for October 1, 2024 compared with October 1, 2023 for all areas & types:

Active Listings: 19,643 versus 13,404 last year – up 47% – and up 6.6% from 18,430 last month
Under Contract Listings: 7,261 versus 6,499 last year – up 11.7% – and up 9.1% from 6,658 last month
Monthly Sales: 5,447 versus 5,573 last year – down 2.3% – and down 4.9% from 5,730 last month
Monthly Average Sales Price per Sq. Ft.: $284.46 versus $285.28 last year – down 0.3% – and down 2.1% from $290.53 last month
Monthly Median Sales Price: $442,000 versus $432,000 last year – up 2.3% – and up 0.5%from $440,000 last month

At last we can see some signs of life in the re-sale housing market after an extended period in limbo. Reaction to the lower mortgage rates that have emerged since July has been slow in coming but is now detectable. Under contract listings went up over 9% during the course of September and are almost 12% higher than this time last year.

Sales volumes during September remained painfully low, but the housing market does not turn on a dime. We should start to see better closing numbers during October as long as the under contract counts keep improving.

Pricing fell back again after a short term increase during August. In fact the average $/SF is very slightly lower than it was a year ago. However the median sales price is up 2.3% from last year, so there is no need for despair. Pricing is very stable.

Re-sale supply is increasing, as it usually does between August and November, so the extra demand is being exceeded by extra supply. This means we can expect the CMI to drift lower for another month and buyers will continue to have favorable negotiating power. If supply starts to fall sometime in November, which we would normally expect. then we can reasonably expect the CMI trend to reverse and move higher again by the end of 2024, which would indicate balance.

The contract ratio has edged up very slightly from 36.1 to 37 over the course of September. Both figures represent a balanced market, but edging up is better than drifting down. If we are going to see significantly more favorable conditions for sellers, then look for this number to reach 45. This is where we stood last June. This will likely happen into next year the spring season, which starts in March. Now, until January, it is a good time for buyers to get a better deal before the competition begins. Demand will outdo supply by spring into summer, especially if interest rates are at 6%.

Mortgage Rates • September 19, 2024

Mortgage Rates Drop to Lowest Level in over a Year and a Half

by Shawn Keane

Mortgage Rates Drop to Lowest Level in over a Year and a Half

Mortgage rates have hit their lowest point in over a year and a half. And that’s big news if you’ve been sitting on the homebuying sidelines waiting for this moment.

Even a small decline in rates could help you get a better monthly payment than you would expect on your next home. And the drop that’s happened recently isn’t small. As Sam Khater, Chief Economist at Freddie Mac, says:

“Mortgage rates have fallen more than half a percent . . . and are at their lowest level since February 2023.”

But if you want to see it to really believe it, here’s how the math shakes out. Take a closer look at the impact on your monthly payment.

The chart below shows what a monthly payment (principal and interest) would look like on a $400K home loan if you purchased a house back in April (this year’s mortgage rate high), versus what it could look like if you buy a home now (see below):

Going from 7.5% just a few months ago to the low 6s has a big impact on your bottom line. In just a few months’ time, the anticipated monthly payment on a $400K loan has come down by over $370. That’s hundreds of dollars less per month.

Bottom Line

With the recent drop in mortgage rates, the purchasing power you have right now is better than it’s been in almost two years. Let’s talk about your options and how you can make the most of this moment you’ve been waiting for.

Mortgage Rates • September 19, 2024

Falling Mortgage Rates Are Bringing Buyers Back Sept 2024

by Shawn Keane

Falling Mortgage Rates Are Bringing Buyers Back

If you’ve been hesitant to list your house because you’re worried no one’s buying, here’s your sign it may be time to talk with an agent.

After months of high rates keeping buyers on the sidelines, things are starting to shift. Rates are already coming down due to a number of economic factors. And yesterday the Federal Reserve cut the Federal Funds Rate for the first time since they began raising that rate in March 2022. And while they don’t control mortgage rates, this sets the stage for mortgage rates to fall even further than they already have – especially since more cuts from the Fed are expected into next year. And lower mortgage rates are bringing more buyers back into the market. Lisa Sturtevant, Chief Economist at Bright MLS, says:

“A drop in the cost of borrowing will help fuel more homebuyer demand . . . Falling rates will also bring more sellers into the market.”

The best part? You can take advantage of that renewed buyer interest.

As Rates Fall, Buyer Activity Goes Up

The graph below illustrates the relationship between falling mortgage rates and rising buyer activity. The orange line represents the average 30-year fixed mortgage rate, while the blue line shows the Mortgage Bankers Association (MBA) Mortgage Application Index, which tracks the number of mortgage applications.

As you can see, as mortgage rates (orange) come down, the Mortgage Application Index (blue) rises, showing more people start to re-engage in the process (see graph below):

What This Means for You

According to the National Association of Realtors (NAR), home sales increased in July, which was a welcome shift after four straight months of declines. If you’re a homeowner thinking about selling, this uptick in buyer activity works in your favor.

More buyers means more competition, which can lead to higher offers and shorter time on the market for your house. And, according to Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA), this trend is expected to continue:

“MBA is expecting that slower home-price appreciation, coupled with lower rates, will ease affordability constraints and lead to increased activity in the housing market.”

All in all, the market is becoming more accessible to a wider range of buyers, which could result in even more people looking to purchase a house like yours.

With more buyers entering the market, now’s the time to start getting your house ready to sell.

Bottom Line

The recent decline in mortgage rates is already driving more buyers into the market, and experts project this trend will continue. Let’s work together to take advantage of this increased buyer demand and get your house ready to sell.

My Monthly Market Summary • September 6, 2024

Market Summary for the Beginning of September 2024

by Shawn Keane

Market Summary for the Beginning of September

Here are the basics – the ARMLS numbers for September 1, 2024 compared with September 1, 2023 for all areas & types:

Active Listings : 18,430 versus 11,969 last year – up 54% – and up 5.5% from 17,474 last month
Under Contract Listings : 6,658 versus 7,111 last year – down 6.4% – and down 8.6% from 7,287 last month
Monthly Sales: 5,683 versus 6,267 last year – down 9.3% – and down 8.5% from 6,208 last month
Monthly Average Sales Price per Sq. Ft.: $290.60 versus $282.14 last year – up 3.0% – and up 1.3% from $286.74 last month
Monthly Median Sales Price: $440,000 versus $435,000 last year – up 1.1% – but unchanged from $440,000 last month

The re-sale market continues in the doldrums and has reacted very little so far to the lower mortgage rates that have emerged since July. Under contract listings went down a further 8.6% during August rather than staging a recovery. Demand appears to be stronger in the new home sector but that has a relatively modest effect on the MLS statistics because the bulk of new homes are not listed on the MLS. However, one look at the stock price charts for the major homebuilders will tell you they are in a good mood.

Re-sale supply usually rises between August and November, but this year the trend got off to an early start and we have 5.5% more listings active and without a contract than a month ago. With demand weak and supply rising, sellers are not getting the break they were probably hoping for. Concession to buyers and price cuts continue to be common and widespread.

The contract ratio is somewhat less stable, and this represents a further cooling in the market. It seems many potential buyers want to see rates drop below 6% before they make a move.

The only bright spot for sellers is that pricing improved during August with the average $/SF rising 1.3% from July. However, the median sales price was unchanged and is up only 1.1% from a year ago. This is less than inflation so in real terms homes are cheaper than this time last year. This statement does not apply to the very top end of the market which has significantly risen in price over the last 12 months. In fact, we saw a new record of almost $32.4 million paid for a new home just completed in Paradise Valley’s Mummy Mountain Estates. Unusually, this was a spec home and it sold for more than $2,000 per sq. ft. The market over $5 million is not seeing the same conditions as the regular market.

It would take a resurgence in demand to pump more life back into this dormant regular market and so far it seems that the Federal Reserve has not done enough by suggesting they are in favor of dropping the base rate. The question now is whether actually dropping the rate in September is going to be an event or a snooze for home buyers.

As usual, we will have to wait and see. Look to the under contract count to be the first thing to show any pick-up in demand. Source Cromford Report

Did you know that the housing affordability index has declined over the past four years; the Housing Affordability Index, which measures whether a typical family earns enough income to qualify for a mortgage on a median-priced home, has dropped to its lowest levels since 1996. This indicates that housing has become less affordable for the average American household.

The average American needs to spend an additional $11,434 annually to maintain the same standard of living they had in January 2021. This increase is primarily due to higher costs in essential categories like food, transportation, housing, and energy. Unfortunately, wages haven’t kept up with inflation. All this impacts affordability for homes that have increased so much. The good news is that if the unemployment rate stays under 4.4% (Arizona is at $3.4%) and mortgage interest rates drop below 6%, it will maintain a robust housing market and economy. We must get through this slow time of the year and the election; things will pick up again.

There is pent-up demand for housing if mortgage interest rates are below 6%.

VA loan programs allow 0 down out of pocket. Conventional loans require as little as 3% down, and FHA loans require 3.5% down. With a reasonable offer, the seller may pay most or all of the buyer’s closing costs. There are also down payment assistance programs.

Please visit my website for up-to-date information, daily blog, monthly reports, and seller and buyer guides, and sign up for Neighborhood News, “the best way to stay connected to what’s happening in the real estate market in your area.” See homes that are for sale and recently sold, find out if home sales in your neighborhood are trending up or down, and see what homes around you are currently selling for. Also, you can search real-time listings in any market area under SEARCH FOR HOMES. Call or text me anytime.

The best compliment is a referral to your family and friends! Thank you so much!

All the best,

SHAWN KEANE

REALTOR, ARIZONA
(602) 989-3209 Cell

shawn.keane@azmoves.com

Visit My Website | Home Valuation | Read My Reviews

Markets • August 30, 2024

Hello from Shawn; where will things be in a year

by Shawn Keane

Hello from Shawn; where will things be in a year

I would love to hear your thoughts…..

You can click below to see what others say about how the 2025 housing market may look like.

My thoughts and some statistical facts: As long as the economy can maintain jobs and interest rates continue their downward projection, the housing market should continue to support these levels and likely move up in 2025.

However, a lot can change in the coming months; the consumer is looking financially stressed, and there are signs everywhere that they are pulling back on spending. Overall, delinquency rates for credit cards and auto loans have increased; in 2024, auto loan balances were 90 or more days delinquent, the highest rate since early 2021. The delinquency rate on credit card loans has almost doubled compared to early 2021, and credit card loan balances have increased by nearly 30% since early 2021, an all-time high (many Americans are using their credit cards for essential living expenses). Then you have the housing affordability index, which has declined over the past four years; the Housing Affordability Index, which measures whether a typical family earns enough income to qualify for a mortgage on a median-priced home, has dropped to its lowest levels since 1996. This indicates that housing has become less affordable for the average American household.

I mention all this because it could profoundly affect the direction of the housing market in the next year or so. Did you know that 28% of all home sales in Arizona this year were from cash buyers, leaving 72% that need a loan?

Please be on the lookout for my Phoenix area market report in the coming days. It will be detailed and specific to the Phoenix and surrounding housing market.

2025 Housing Market Forecasts: What To Expect Nationally