Published June 12, 2023
Market Losing Steam...with a Silver Lining
Market Losing Steam...with a Silver Lining
by John A. Sposato
So, the news this week shows buyer demand still dropping. This is 6 straight weeks of reduced pendings (homes going under contract.) The increase in interest rates is really taking its toll on the buyers out there.
As a result of the reduced homes going under contract, the housing inventory reduction that we have seen all year has flattened out this week...If this trend continues, prices will start to flatten after the MoM increase we have seen in 2023.
So, what's the silver living?
Well for buyers, there is the saying: "Marry the home and Date the rate." This means if you are looking for a home right now and you fall in love with that home, then buy (marry) it. The interest rates will adjust downward in the next year and you can refinance the current rate you are currently "dating". Make sense?
But wait, there's more! The extra added silver lining for buyers right now is there are simply less buyers out there writing contracts...which means more homes to choose from and less competition.
What's the silver living for Sellers?
Well, it's about pricing. The median home price in Phoenix has been increasing all year. We have gained back about 5.5% in value in 2023. Pricing is a trailing indicator...which means we will see the effects of today's slower market in about 30-90 days. So, pricing should remain higher for the next few months before we start to feel the effects of less pendings and increasing inventory. This means if you are thinking off selling, now is the time to do so, in order to capture your highest value in the short run, before pricing flattens or begins to turn downward this summer...
Here are the Cromford Report graphs for you to view:
DECREASE in Pendings week over week
FLATTENING of Housing Inventory this week
MEDIAN Sales price increasing in 2023
