Realty Executives Phoenix
Shelly S. Smith
Shelly S. Smith
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Nationally, for the first time in a very long time, there fewer than 500,000 homes on the market. Think about that...an average of 10,000 homes on the market in each state across the nation! It's absolutely insane. I often find myself thinking about how grateful I am our younger son found a home mid-summer 2020. It was the third home on which we wrote an offer and there were multiple offers, of course. Negotiating for any credit from the seller? Well, that was almost non-existent; the listing agent and seller were of the mindset to move on to the next buyer in line if we couldn't come to an agreement.
Our son and his wife were first time home buyers and that segment of the market made up only about 30% of all buyers in 2020. This year has resulted in the highest amount of sales dollar volume of any year since 2001! That's saying something considering the run up in prices of 2005. Bank-owned homes (REO's), government-owned homes, and short sales are nearly non-existent right now. The annual average sales price has steadily risen since 2011. I can think of one client who bought at what was later decided the bottom of the market (fall of 2011). They still own the home but would be able to sell it at a premium now....if there was somewhere to go.
Interest rates remain so favorable but it remains to be seen what will happen as 2021 unfolds considering the pandemic, vaccine, interest rates, migration and employment security. Will affordability be at risk as the shortage of homes pushes prices higher?
Not only are home sales outpacing other years, the rental market is at a peak as well. The current rental price per foot in the valley right now is $1.18 and tenants are hard pressed to find a rental. Never mind the eviction moratorium keeping many tenants in place.
The home building industry has also not kept pace with sales demand and Arizona continues to see an influx of buyers from other states (23% of new residents are from California). There are a number of things that have fueled the low inventory fire....