Housing Market Updates • September 5, 2023

Sept. Housing Market Update

by Paula Rosentreter

Residential real estate across the metropolitan Phoenix market was seasonally low in August, as expected. Luxury activity is particularly low during the summer months. It is currently a seller’s market across the valley except for Queen Creek, Maricopa and Casa Grande, which are balanced.

Inventory is Stabilizing, Still Very Low

We’ve seen a continuous decline in the number of homes for sale since last October, though the trend has slowed in recent weeks. Supply is 51% below normal for this time of year. The ratio between supply and demand is resulting in a seller’s market, though it is mild compared to the frenzy we saw eighteen months ago. Given that most homeowners with mortgages have extremely low interest rates, low inventory is likely to continue for some time. Those that do sell are capitalizing on favorable conditions.

Is There Ever a Bad Time to Buy?

Mortgage rates are keeping some buyers on the sidelines with demand 24% below normal for this time of year. However, finding the right home can be challenging in this market and buyers have less competition for homes right now so it may very well be the right time to buy. There are indications of pent-up demand that will eventually break free, which could bring us right back to multiple offers and sales above asking price. Additionally, here are some of the ways lenders are helping buyers get into the home they want now:

Get a lower interest rate NOW – seller concessions can be used to buy down your mortgage rate for the first 2-3 years. This temporary rate buydown reduces your mortgage payment until rates hopefully come down and you refinance. As an example, if the mortgage rate you qualify for is 7%, a 2-1 buydown means it’s 5% for the first year (2 full points lower), 6% the second year (1 point lower), and then it goes to the full 7% after that.
Refinance at no cost – most lenders are offering buyers the opportunity to refinance with no lender or appraisal fees after six on-time payments up to three years from their closing date.

Rental Inventory Rising, Rates Stabilized

The supply of long-term rental properties (excluding vacation rentals) continues to rise, which has led to a stabilization of rental rates. This increased inventory may be coming from short-term rentals since our market is oversaturated in that area. Eventually, investors may decide to sell these short or long-term rental properties, which could help ease the lack of inventory of homes for sale.

Questions or More Info?

If you have questions or would like more information on a specific part of the valley, please don’t hesitate to reach out to me at 312-608-9041 or paula.rosentreter@azmoves.com

Source: The Cromford® Report

Local Resources • June 26, 2023

AZ Water Update

by Paula Rosentreter

Arizona is NOT Running Out of Water

Water usage and availability is a hot topic in Arizona. I recently attended two water summit events – one held by the Scottsdale Association of Realtors featuring a panel of state and local experts and another event featuring the Deputy Water Services Director from the City of Phoenix. I learned quite a lot and left very encouraged. Here are some of my key take-aways:

I heard loud and clear that we are NOT going to run out of water in Arizona. Period.
While our population continues to grow, Arizona’s water use has remained fairly stable for the last 50+ years due to innovation and conservation.
Arizona gets 40% of our water from the Colorado River, 40% from groundwater, 17% from in-state rivers, and 3% from reclaimed water.
The Colorado River supplies water to 7 states. Long-term drought conditions, plus climate change (warmer temps), has resulted in historic low levels at the two biggest reservoirs. Last year, the federal government essentially told the affected states to work together to come up with a solution or they would. There was a 3-year solution agreed to in May of this year.
Groundwater is the other major source of water and Governor Katie Hobbs recently announced restrictions on new residential subdivisions (new construction) that rely on groundwater to demonstrate the required 100-year water supply. Rest assured that we will continue to grow and this change will drive innovation.
73% of water in Arizona is used by agriculture, 21% is used by municipalities, and 6% is industrial use.
If you’re wondering why we don’t have residential restrictions in place limiting water use, the short answer is that voluntary efforts are working. That said, we ALL need to continue to do our part.

How You Can Help

Hopefully by now, you’re thinking about ways you may be able to save water. Here are some ideas for consideration:

The vast majority of residential water use is outdoors and most people overwater their landscape. Experts suggest watering no more than twice per week. Water deeply and slowly so it has time to soak in, and water at night so there is less evaporation. Adjust your watering levels by season or even by month and if you have grass and it’s not being used by children or pets, covert it desert plantings.
Check for water leaks in your home (inside and out) four times per year. Fix them right away. You’d be surprised how much this can help.
When you replace appliances, faucets, etc. look for ones that have either EPA WaterSense or Energy STAR rated labels.
Install smart devices such as smart irrigation controllers, soil moisture meters, and smart leak detectors.