Realty Executives of Northern Arizona
Christmas and a new Decade are right around the corner,
Best Wishes to you and your family during this Wonderful Holiday Season.
As we approach the New Year, if you have thoughts about Buying or Selling, I wanted to pass along what I am seeing. The chart below comes from one of the companies I subscribe to that helps me stay current with Real Estate nationwide.
Granted, this is talking about a nationwide issue, but in reality, we are seeing the same thing here in Flagstaff.
We are on track to sell fewer homes this year than last. Not an alarmingly high number, looks like close to 1% fewer homes both that came to the market this year, or sold this year.
If you are a Seller:
The demand is very high for homes that are priced comparable to others in the same area under $700,000.
The chart above will show you the nationwide figures for our housing supply, as mentioned above, Flagstaff is no different, and follows the article at the bottom.
The second chart, below, is the Foot Traffic of buyers, you can see the upward trending in September and October, November appeared to be no different, though we have no figures yet, again trending with the article below, and here in Flagstaff.
If you decide to sell,
Planning ahead would be very important.
The discussions would the standard, staging, planning, pricing, etc, but just as important, the 'What If' we get an offer and have not found a replacement home yet?
We will make plans for that.
There are safeguards that can be put into place to make sure your home is not sold without you finding the right one to relocate to.
With these Safeguards in place, there are few reasons not to go head with your plans to sell.
If you are a Buyer:
Inventory is tight and you do not want to make the error of reacting to fast. But once you have a good idea of what you want in a home and find that home, reaction time will be key to the success of getting an accepted offer.
Before making that offer, we are able to do the research to make sure the asking price and your offer price are within other homes that are comparable in the same neighborhood.
So What Does This All Mean?
To be honest, it will be easier this coming year to sell then to buy.
Should that stop you from buying, absolutely not! Especially with the current interest rates. It just means we have to keep an eye on what comes to the market on at least a daily basis, get out to see those homes ASAP, and if and only if it is the right home, react.
This coming year the housing market will be defined by 3 things- inventory, interest rates, and appreciation. But the biggest issue the housing market will face in 2020 is an inventory shortage. There aren’t enough homes on the market for buyers, especially on the lower end of the market. This is a topic that has come up frequently within the past several months.
Based on what is forecasted, we know that interest rates are projected to remain low and that appreciation is expected to continue as we move into 2020. Additionally, the upcoming election will provoke many unique perspectives on the health of the US housing market. The challenge will be understanding what is actually happening and how you can best position yourself if you are thinking of buying or selling your home.
According to realtor.com:
“Despite increases in new construction, next year will once again fail to bring a solution to the inventory shortage that has plagued the housing market since 2015. Inventory could reach a historic low as a steady flow of demand, especially for entry level homes, and declining seller sentiment combine to keep a lid on sales transactions.”
Diana Olick at CNBC:
“Inventory has been falling annually for five straight months, after it recovered slightly toward the end of last year, due to a spike in mortgage rates. Rates began falling again by spring of this year. Homebuilders have been increasing production slowly, but it’s not enough to meet the increasingly strong demand.”
George Ratiu, Senior Economist with realtor.com
"As millennials -- the largest cohort of buyers in U.S. history -- embrace homeownership and take advantage of this year's unexpectedly low mortgage rates, demand is outstripping supply, causing inventory to vanish. The housing shortage is felt acutely at the entry-level of the market, where most millennials are looking to break into the market for their first home."
The most important thing you can do is understand what is happening in your local market. You may not be able to avoid some of the issues brought on by low inventory, but you can be educated and prepared. Let’s connect and discuss the options that make the most sense for you and your family.
About the Author:
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Where the Experts are - Serving Flagstaff and Northern Arizona since 1977
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