There's good news on the home front in the Valley. As we head into spring, the real estate market continues to be a seller’s market. Inventory and interest rates are staying low while sale prices keep rising.
Historic Lows
Interest rates hit a record low in January 2021, which means the only direction to go is up. But even though mortgage rates are rising, they are still at historic lows.
Rates have risen a little over 1 percent since the beginning of this year. It's important to note that while rates are expected to keep rising, they will not rise as quickly as they have been more recently. House prices are continuing to increase, too.
For buyers, this means you should not wait to make a purchase of your dream home or to downsize or rightsize to a home that fits your current needs. Buying now means your new home will gain value right away and you’ll get a lower mortgage rate than if you were to wait.
Inventory Remains Low
Throughout Maricopa county, there is still a shortage of houses on the market. In the Greater Phoenix area, more homes are being bought as rentals now, which is part of the reason for the shortage of houses for sale. With more buyers shopping than there are houses available, sellers are in the driver’s seat of negotiations. However, there’s no telling when that might change.
While there aren’t actually more buyers in the market than usual, the shortage of houses makes it seem that way. Last month, we actually saw a small increase in single-family homes for sale – the first increase in months. It’s too soon to say if the increase in inventory is a trend, but if more houses continue to come on the market or the number of buyers decreases, sellers may not have as big an advantage anymore. So if you’re thinking about selling, it’s best to start the process on the sooner side.
House Prices Continue to Rise
In Arizona, the median home sale price hit an all-time high of $450,000 and prices show no signs of slowing. This is good news for sellers! If you’ve been waiting to buy because of the rising prices, don't expect them to come down anytime soon. Remember, that means once you close on your new house, it’ll increase in value.
As home prices and mortgage rates continue to rise, the cost of rent has finally come down a bit compared to this time last year. Over time, this trend could mean fewer potential buyers in the market as renting becomes a more attractive option in the Valley. That’s one more reason to sell now.
Key points to note:
● Interest rates have gone up, but are still low.
● Home prices are still rising.
● It remains a seller’s market—for now.
● If you are thinking of buying or selling, it's best not to wait.
If you have been thinking about buying or selling, connect with me today so I can help you come up with the best strategy for your family's needs.
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