Hello Family and Friends,
As we begin 2018, I’d like to update you
on the trends we saw throughout 2017, explain statistics collected by the
Arizona MLS, and give insight into what we can expect in the upcoming months. The Arizona housing market in 2017 was strong
and steady, 2018 looks to be even better!
Our housing trends are best described in three groups. For homes at the low price point, $200,000 or
less, the market was favorable for sellers which resulted in higher sales price
and fewer days on market. With the
higher priced homes, $800,000 and above, it was a buyer’s market. Homes in this group spent longer time on the
market and buyers were able to negotiate more in their favor. The middle-price point homes were a combination
of both a sellers’ and buyers’ market depending on the price and condition of
the home. The 2017 housing market in
this price range was definitely a push-pull market with sellers trying to push
the sales prices higher and buyers better educated on home values trying to
pull down prices. It was an active
housing market! In fact, by the end of
June we were experiencing the third highest sales volume in the 17 years that
the ARMLS STATs group have been reporting sales numbers.
Financing
In 2017, there were 113,367 homes sold
in Maricopa Country. This is a 7%
increase from 2016. Two noticeable
changes took place with conventional and FHA loans. The 2017
ARMLS Statistics Report outlines that “there were 8,819 more conventional
loans and 3,283 fewer FHA loans made in 2017 compared to 2016. Cash buyers
accounted for 21.8% of all purchases in 2017 compared to 21.9% in 2016.
Translation: the same percentage of buyers are financing their purchases as in
2016. Of those financing their home purchases, a greater percentage of
homebuyers chose conventional financing over FHA.” One possible explanation is that buyers
using conventional financing with low down payments and having to pay the
required mortgage insurance can have that mortgage insurance removed after
reaching 20% equity in the home. FHA
financing does not offer this option.
Interests
Rates
After a year of lower interest rates we are now seeing the Federal
Reserve pushing up the rates. Recently our
buyers have received quotes on mortgage rates up to 4.625% .
Foreclosures
Foreclosure
numbers are not talked about as much as they used to be, however they are still
just as important. There were 25.6% fewer foreclosures in Maricopa County in
2017 than in 2016.
There are a couple reasons for this. “First, buyers are more qualified and putting
large amounts down on their purchases in 2017. Second, last year we saw 8%
overall appreciation rates from December 2017 to December 2016. And lastly because banks are following
consistent and well based loan standards. The pool of bad loans during the
bubble will eventually dry up, however, the lingering effects are still
present.” (2017 ARMLS Statistics Report)
Sales Volume
Our market
has followed a similar, positive trend for about the last 4 years. We continue
to see declines in foreclosures and increasing average home price. The sale of newly built homes increased 14.4%
from December 2016 to December 2017. According to NAHB Chief Economist Robert Dietz,
“As the overall economy strengthens, owner-occupied household formation
increases, and the supply of existing home inventory tightens, we can expect
the single-family housing market to make further gains this year.”
Pricing
The average
sales price increased 9.5% from 2016 to 2017 .
2018 – The Year Ahead
In 2018, we will see that low inventory
numbers will lead to higher prices.
Higher prices partnered with rising interest rates will even out demand
and bring a comparable or lower sales volume number than in 2017. We can also expect homes buyers to become
continuously better qualified. Personally
I believe if interest rates continue to go up this will compromise the
purchasing power of the buyers and will affect the average sales price in 2018.
One thing is certain in our world –
people will make life changes and will need to buy or sell homes. Give
me a call at (602) 618-6764 if you are contemplating a change and need real
assistance this coming year.
Your Real Estate Broker,
Mary
Silver Alliance Realty is here to help you with all your real estate needs.
We make buying and selling your home SIMPLE!
We make buying and selling your home SIMPLE!
Contact Silver Alliance Realty
Mary Platt
Designated Broker
(602) 618-6764
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