Gilbert and East Valley Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Feb. 19, 2024

Monday Morning Market Update 2-19-2024

There has been so much misinformation about the real estate market in the national media lately...My goal is always to provide our clients with accurate, real-time market data.

 

2024 Housing Outlook: Smart Moves for Buyers & Sellers in an Election Year Shake-Up!

 

For Buyers:
With many existing homeowners comfortably staying put these days, more attention is placed on first-time home buyers, affordability, and supply of homes. The first thing that comes to mind is the choice between renting and buying. According to RealData, the median cost of a 3-bedroom apartment at a 50+ unit complex in Q2 2023 was $2,100 per month in Maricopa County. The median size is roughly 1,250 square feet. The past 30 days of sales show the median sale price of a 1,200-1,500 square foot, 3+ bedroom single family starter home to be $370,000 in Greater Phoenix.

Many first-time homebuyers put down 3.5% on an FHA loan ($13,000 on $370K), and last month, nearly 70% in this price range had a seller or builder agree to contribute to closing costs with a rate buy-down. That is a median contribution of $10,000 from the sellers. On February 1st, the average FHA rate was 6.0%, according to Mortgage News Daily. With a 2/1 buy-down from the seller, the first-year estimated payment would be $2,159 monthly, including taxes, insurance, and PMI. A permanent 1% buy-down would equate to $2,375 per month. This puts the monthly cost to buy a small starter home within a few hundred dollars of the median rental rate.

 

In Pinal County, the median cost drops to $310,000, and over half of the properties sold in the past 30 days are newly built within the past five years or under contract for 2024. On a 2/1 FHA buy-down, the estimated PITI payment is $1,825 per month, and a permanent 1% buy-down would be $2,006.

 

Currently, there are 366 active single-family listings between 1,200-1,500 square feet, with 3+ bedrooms, under $370,000 in the Arizona Regional MLS (Pinal County has 53% of them). There are 312 listings under contract, and 191 have closed in the last 31 days. This is a hot market segment.

2024 is expected to be another year of change for the Greater Phoenix housing industry, but this time, the shift is expected to be towards stability in home appreciation and improved affordability measures as incomes catch up. After hitting rock bottom for demand in 2023, things are looking up.

 

For Sellers:
It’s an election year! Every four years, there is an expectation that the drama, uncertainty, and manipulation that comes with presidential campaigns will dramatically affect the housing market, specifically prices or mortgage rates.

Spoiler Alert: It doesn’t. The main influence on the housing market comes from policies, not the elections themselves. For instance, the stimulus packages and policies that were passed during the 2020 COVID-19 election year and continued into the next administration were the first stones to cause a ripple effect of fortunate and unfortunate events in the housing market over the past four years.

 

So what’s to be expected this year? There is one market that can be affected by an election: the stock market. After the last four elections, the stock market responded positively, which affected both luxury buyers and retirees with a high percentage of cash purchases. If a cash buyer expects their investment portfolio to be worth more after an election, they may simply put off their home purchase until the Spring. This can cause contract activity to stagnate for a couple of months, but not enough to affect prices, and this mild effect can be offset by other mitigating factors, like seasonality, that would make the impact unnoticeable.

 

So far in 2024, listings under contract over $1M are higher than in 2022, which is the #1 record year for this price range. Active listings over $1M are also at record highs, offsetting the increased demand and stabilizing price appreciation.

Retirement communities are not experiencing the same, however, as this segment is highly sensitive to inflation. When prices for necessities are high and uncertain, many buyers in this segment will choose to keep their cash for safekeeping. Perhaps they’ll feel better after the election.

 

*Cromford Market Index™ (CMI) is a value that provides a short-term forecast for the balance of the market. It is derived from the pending, active, and sold listings trends compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.

 

 

 

Questions regarding the market and if it's a good time to sell? Let's Chat

 

Feb. 13, 2024

Market Update 2-12-2024 Diverse Market Trends: Analyzing Seller and Buyer Dynamics Across 17 Cities

The marketplace is experiencing increasing diversity, with certain sectors experiencing a slowdown and others becoming more favorable for sellers. Currently, 13 cities have witnessed a rise in their Cromford® Market Index over the previous month, yet four cities have seen a decrease, with several others on the brink of decline. Scottsdale and Surprise have recently reported decreases, joining Fountain Hills and Goodyear. Additionally, Buckeye, Maricopa, and Paradise Valley have seen declines in the past week.

 

The Cromford® Market Index (CMI)* for the 17 cities has seen an average increase of 8.1%, a drop from the 10.5% increase noted last week. Although there's still an overall positive monthly trend, it's losing momentum, which is concerning for sellers, especially at this time of the year. The supply is on the rise in pricier locales as well as in some of the most affordable and remote areas of Central Phoenix. For the first time since 2020, Paradise Valley has surpassed 200 active listings without a contract. After a period of concern with inventory levels dipping below 100, Cave Creek has rebounded but is also witnessing a growing inventory.

 

Mid-range areas relatively close to the valley's center, such as Glendale, Tempe, Chandler, Gilbert, Peoria, and Phoenix itself, have performed well over the last month. These areas are demonstrating a healthy balance of supply and demand, even though the volume of transactions remains low.

Of the 17 cities analyzed, 10 are considered seller's markets, four are balanced, and three are categorized as buyer's markets.

 

*Cromford Market Index™ (CMI) is a value that provides a short-term forecast for the balance of the market. It is derived from the past four years pending, active, and sold listings trends compared with historical data. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.

 

 

 

ATTRACTING BUYERS 

1. FEWER, BETTER PHOTOS 

 

Agents think more photos equals better marketing. I found that using only a home’s best photos makes it stand out online and limits buyers' possibility of seeing something they don’t like. This results in more buyer inquiries. 

2. CURIOSITY-CREATING AD COPY 

Traditionally, agents write ad copy that is factual and filled with clichés. I use well-crafted sentences that create curiosity and conclude with a compelling reason to call. This increases buyer inquiries. 

3. COMPETITION BASED PRICING 

 

Traditionally, agents advise sellers to price their home using previous similar sales. I will show you a detailed analysis of homes currently for sale that buyers will compare to yours. This leads to smarter pricing, which increases buyer inquiries. 

 

BUILDING EXCITEMENT

4. SCARCITY/SOCIAL PROOF

Instead of simply setting a showing when buyers inquire, I light up with enthusiasm, extol your home’s most unique features (creating scarcity), and talk about the other buyer interest (social proof), which excites buyers to see your home. 

5. OPPORTUNITY SHOWING

 

While talking with buyers, I mention that the first public showings are on an upcoming Saturday. I then offer serious buyers a chance to see your home early, setting the stage for us to have them make you a premium price offer to head off future buyers. 

6. COMING SOON SIGN

 

When I meet buyers to show your home, we have no sign
in the yard (or use a “coming soon” sign) to reinforce that the showing is an “early chance.” To view your home before other buyers, which reinforces the perception they are among the first to see your home. 

 

GENERATING OFFERS

7- STEP SHOWING PROCESS

MY 7-Step Home Showing Process incorporates four psychological drivers (scarcity, social proof, fear of loss, and opportunity) to portray your home as more unique, desirable, and valuable in buyers’ eyes, a key to generating higher offers.

 

8. OPPORTUNITY PURCHASE

At showings, I offer interested buyers a chance to head off other buyers at the public unveiling by making you a premium price offer. Creating perceptual upcoming competition with the chance to avoid it results in higher offers. 

 

9. COUNTER OFFER INTELLIGENCE

 

After buyers submit an offer, I developed a 4-step conversation to determine how much more they will pay over their initial offer. This enables us to advise you to make a maximum-price counteroffer and not leave money on the table. 

 

 

SAVING ON REPAIRS

10. BCW FORMULA

After the sale contract is signed, buyers typically have an inspection period. Our Broken/Cosmetic/ Worn Home Inspection Template helps eliminate unfair repair requests from buyers and can save you thousands after the sale is made. 

 

Questions regarding the market and if it's a good time to sell? Let's Talk!

Jan. 22, 2024

Monday Morning Real Estate Update 1-22-24

Real Estate Revolution: Rising Prices and Accelerating Demand Set New

Market Milestones

 

In recent real estate market developments, the Cromford® Market Index (CMI)* for the 17 cities studied has shown a significant uptick, with an average increase of 12.6%. This marks a rapid acceleration beyond last week's 10% rise. Such growth can be attributed to the reduction in interest rates that started in October, which has evidently led to a higher number of offers for homes listed for sale. Additionally, January has brought a healthy influx of new listings, although the total supply is still considerably lower than usual. Notably, the rate of increase in demand is outpacing that of supply.

 

 

Leading the market activity this week are cities like Gilbert, Glendale, Surprise, Phoenix, and Peoria. Meanwhile, slower progress is observed in Maricopa, Goodyear, and Paradise Valley, though it's worth mentioning that these areas are still performing better than the previous week. Currently, 10 out of the 17 cities are identified as seller's markets, with four maintaining a balanced market and only three classified as buyer's markets. A significant shift is seen with Cave Creek recently moving out of the buyer's market zone.

 

Despite these optimistic signs, the sales volume remains low, which is typical for January due to reduced contract signings in December.

However, the vigorous growth in new contracts indicates a potential market recovery, following a trend similar to a normal seller's market. This cautious optimism is reflected in the home builder confidence survey, with the NAHB / Wells Fargo Housing Market Index climbing from 34 in November to 44 in January, a notable improvement from last year's 31.

 

Simultaneously, the real estate market has witnessed another milestone, with the average price per square foot of active listings reaching a new record high of $366.43. This figure surpasses peaks observed in May 2022 and June 2023. However, the rising average price per square foot, up 2.1% in the last two weeks, indicates sellers' growing confidence. This trend is consistent across different regions and property types.

 

As of January 20, there has been a marked increase in contract ratios in several cities, particularly for single-family detached homes. The detailed percentage increases for these properties are highlighted in the accompanying table.

 

  1. Apache Junction +64% to 94

  2. Anthem +47% to 71

  3. Arizona City +47% to 57

  4. Gilbert +46% to 65

  5. Sun Lakes +45% to 59

  6. Chandler +43% to 72

  7. Tempe +31% to 53

  8. Peoria +31% to 49

  9. Gold Canyon +30% to 32

     

These are the locations that have experienced the most rapid improvement in demand versus supply.

 

A handful have gone backward:

  1. Fountain Hills - down 11% to 36

  2. Laveen - down 15% to 67

  3. Goodyear - down 7% to 33

  4. Sun City West - down 5% to 36

     

Phoenix is up 18% to 48

 

In most areas, a contract ratio over 40 is consistent with a seller's market. More expensive locations tend to have lower contract ratios, so Paradise is only 21 (up 20%), while Scottsdale is 30 (up 15%).

 

The contract ratio is one of the leading indicators of a change in the market.

 

Questions regarding the market and if it's a good time to sell? Let's Talk!

 

 

*Cromford Market Index™ (CMI) is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.

Jan. 15, 2024

Interest rates update

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I wanted to send a quick update on mortgage rates from my most trusted lenders. Last week, I was provided the December Consumer Price Index (CPI) and Producer Price Index (PPI) Inflation reports.  The Core CPI (which strips out food and energy prices) hit 3.90%, which is the lowest level since May 2021.  The PPI fell 0.1% in December, which was lower than expected.  Mortgage rates drop as inflation goes down, so these reports pressured rates lower to the end of the week:
Questions regarding the market and if it's a good time to sell? Let's talk! 
30 Year Fixed Rates
FHA:  6.000%  (6.775% APR)
VA:  5.750%  (6.006% APR)
USDA:  6.000%  (6.154% APR)
Conventional:  6.990%  (7.059% APR)
Investment Property:  7.990% (8.068% APR)
Jumbo Loan:  6.990%  (7.040% APR)
 

**Assumptions - 740 Credit Score, 42% Back End Debt to Income Ratio, 3.5% Down for FHA, 0% down VA, 0% down USDA, 5% Down Conventional, 20% down Investment/Jumbo, No Buy Down Points, $450k Purchase Price, $1 million Purchase Price for Jumbo. 

 

Jan. 8, 2024

A Positive Outlook for Sellers in Key Cities

Reflecting the patterns established since early December, the past week has seen a steady market dynamic, with four cities persistently classified as buyer's markets and 13 as seller's markets. Notably, the Cromford® Market Index (CMI)* for these 17 cities has experienced an encouraging average increase of 6.0%, a substantial upturn compared to the 2.0% increase observed last week. This indicates an accelerating trend in favor of sellers.

 

Cities such as Fountain Hills, Surprise, Glendale, Queen Creek, and Gilbert are leading the pack with impressive improvements of 11% or more in their market indices. Currently, 9 out of the 17 cities are classified as seller's markets, while 4 maintain a balanced market, and the remaining four are categorized as buyer's markets. Maricopa, in particular, is showing signs of recovery, bouncing back from a low of 63.7 recorded on December 25th.

 

This growing trend aligns with the mild optimism we observed in December, which now appears increasingly justified. For the month of January, we are leaning towards mild to moderate optimism, especially regarding market balance. While transaction volumes remain on the lower side, there's a greater likelihood of recovery if the market continues tiling in sellers' favor.

 

 

*Cromford Market Index™ (CMI) is a value that provides a short-term forecast for the balance of the market. It is derived from the trends in pending, active, and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.

Nov. 20, 2023

Emerging Recovery in Real Estate

Cromford® Market Index Shows Signs of Stabilization Amidst Variable City Trends and Lower Mortgage Rates

The Cromford® Market Index (CMI)* for the 17 observed cities showed a decrease of 16.1%, a slight improvement compared to last week's 16.3% drop. Notable declines were observed in Cave Creek, Buckeye, Mesa, Scottsdale, Glendale, Paradise Valley, Surprise, and Phoenix, while Goodyear and Tempe experienced the slowest declines. Remarkably, Goodyear's CMI has begun to increase over the past week.

Out of the 17 cities, ten are still categorized as sellers' markets. Peoria and Cave Creek are in a balanced market state, whereas Surprise, Buckeye, Goodyear, Queen Creek, and Maricopa are buyers' markets. Maricopa and Queen Creek's indices have fallen below 80, and Buckeye has dropped below 70.

 

How much equity do you have in your home?

 

Recent trends indicate a recovery in demand, likely influenced by reduced mortgage rates. Current rates stand at 7.45% for a standard 30-year fixed loan and 6.77% for FHA loans, down from 7.88% and 7.31%, respectively, as of October 31.

 

The contract ratio for all areas and types has risen to 40.56 today, up from 37.46 on November 4. Although lower than a month ago, the trend is reversing from its consistent decline since late May.

Typically, supply diminishes post-Thanksgiving each year. If the current demand trend persists, there's optimism for market stabilization by year-end, contingent upon stable interest rates.

 

*Cromford Market Index™ (CMI) is a value that provides a short-term forecast for the balance of the market. It is derived from the trends in pending, active, and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.

 

June 30, 2023

4th of July events 2023 (East Valley)

Mesa (Downtown) Free

Arizona Celebration of Freedom 2023

Car Show - Food  - Music - Laser Show - Fireworks

6:00 to 10:00 - Fireworks at 9:30 pm

https://tinyurl.com/5n7xx7px

 

Gilbert (Gilbert Regional Park) Free

Gilbert 4th of July Celebration

Food - Music - Fireworks

4:00 to 10:00 - Fireworks at 9:00 pm

https://tinyurl.com/efy3cbw3

 

Scottsdale (West World) $$$

Scottsdale 4th of July Celebration

Food - Music - Rodeo - Fireworks

5:00 to 9:00 - Fireworks at 9:00 pm

https://tinyurl.com/2bffm47j

 

Tempe (Tempe Diablo Stadium) $$$

Tempe 4th of July Celebration

Food - Music - Kid’s Activities - Fireworks

5:00 to 9:15 - Fireworks at 9:15 pm

https://tinyurl.com/3j2bekxz

 

Chandler (Downtown Chandler) Free

Chandler’s All-American Bash

Food - Music- Kid’s Activities - Pyrotechnic Show

7:00 to 9:25 pm

https://tinyurl.com/22y8unst

 

Queen Creek (Schnepf Farms) $$$

Hometown 4th at Schnepf Farms

Food - Music - Foam Water Pit - Fireworks

4:00 to 9:00 pm

https://tinyurl.com/nhhvmw6h

 

June 27, 2023

Median Hits $440K, Annual Appreciation Expected to be Positive Again Soon

For Buyers:

Last month we reported that the year-over-year supply change will be negative within 6 weeks, and at that time, supply was 80% higher than the previous year. Now 5 weeks later, supply is only 3.7% higher than last year’s count and is expected to be below 2022 in another week. New listings continue to be insufficient in replacing properties that have gone under contract, resulting in overall supply dropping an average of 151 listings per week within the last month.

That’s a slower rate of decline compared to previous months, but it’s not because more sellers decided to get off the fence and list their homes. The slower decline is in response to demand weakening when mortgage rates increased from 6.5% to 7.1% within 2 weeks last month, the shock causing many buyers to take a breath. Once again, just when housing economists got optimistic in April about mortgage rates stabilizing or declining, less-than-favorable inflation reports caused them to spike once again. It’s tough to make mortgage rate predictions these days.

Since then, conventional mortgage rates have dropped only slightly, hovering around 6.9%. The downturn in demand has created a noticeable advantage for FHA buyers, who had been mostly rejected by sellers over the past 2 years in favor of cash investors. As investors have retreated back to normal levels this year, putting traditional buyers back in the driver’s seat, FHA increased the amount of money they’re willing to loan to $530K. They also lowered their mortgage insurance premiums by $100s on monthly payments annually. These changes have resulted in the market share of closings in Greater Phoenix funded by FHA going from just 9% in April 2022 to 22% in April 2023 on sales under $600K.

Sellers are still contributing to closing costs and buying down mortgage rates on behalf of the buyers to make the monthly payments attractive and competitive compared to local rental rates. In May, many lenders upped the game and announced new down payment assistance programs and loans with just 1% down. Each program has separate requirements that need to be explained by a qualified loan officer, but they are often focused on getting first-time home buyers into entry-level homes.

You may be surprised when we tell you that does not disqualify many buyers who have previously owned a home. Search the definition of first-time home buyer online, and you’ll find that any individual who has not owned their primary residence within the last 3 years is re-classified as a first-time home buyer. Couples also qualify as first-time home buyers if one spouse has not owned a home in the last 3 years.

For Sellers:

Despite the increase in mortgage rates and subsequent drop in demand, prices continue to rise in Greater Phoenix and are expected to continue doing so for the next 3-5 months. While still down year-over-year, the median sales price has recovered 5% since our December newsletter, up $22K. Before the end of the 3rd quarter this year, it’s very likely annual appreciation rates will turn positive once again.

Nearly every city is officially a seller’s market this month. Maricopa and Buckeye are no longer buyer’s markets. They are now in balance and moving towards seller’s markets once again. The only city remaining in a buyer’s market is Casa Grande at this time. When markets soften like they did last year, the cities on the outskirts fall into buyer’s markets first and are the last to come out. Cities on the interior are the last to go into buyer’s markets and the first to come out. As the interior cities such as Phoenix, Glendale, and Chandler first moved into a seller’s markets in January, the shift of these outlying areas is the final step to coming full circle in the market correction.

Improving market conditions for sellers only slightly relieves the need to contribute to closing costs and rate buydowns for buyers. Over 50% of sales between $200K-$500K involved sellers contributing to buyers’ costs, with the median contribution at $7,500 so far this month. That’s down from January’s sales, where 62% involved concessions in this price range at a median cost of $9,300. So, while things are improving, make no mistake that Greater Phoenix would not be in an appreciating market if sellers were not willing and able to offset the costs associated with closing on a home.
 

Be sure to call if you have any questions about this report or about how the market is performing.

Would you like to know what is happening in your neighborhood? 

Would you like to know the value of your home?

Do you need help deciding whether to sell or not, or would you like to know if now is the right time to buy?


I would be very happy to get you that information.

The commentary was written by Tina Tamboer, Senior Housing Analyst with The Cromford Report ©2023 Cromford Associates LLC and Tamboer Consulting LLC
March 8, 2023

Here’s what builders think of the housing market. Hint: It’s good news!

 

Will 2023 mark the end of this turbulent real estate market?

New home builders seem to think so. After 12 straight month-over-month declines in builder confidence, the trend seems to be reversing course, according to the latest reading of the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The HMI recorded its second consecutive month of builder confidence gains with a score of 72 for February, the strongest reading since September 2022.

Builder confidence is an important real estate market predictor because it reflects the sentiment and expectations of professionals directly involved in the home construction industry. Builders are on the front lines of the housing market and have direct insight into factors such as land availability, material costs, and labor availability, which are critical to their business.

Builders are feeling positive about new home sales and the potential for a more normal and healthy housing market. This contrasts with last year, which saw a surge in demand for existing homes due to the pandemic and supply chain disruptions that affected the new home construction market.

Cautiously Optimistic

Builders are cautiously optimistic about the future as they continue to face challenges such as rising materials costs and shortages of labor and land. However, the positive sentiment among builders is a good sign for the overall health of the housing market and could potentially lead to an increase in new home construction in the coming months.

New vs. Existing Homes

In rising-rate environments, homeowners are disincentivized to sell, exacerbating the housing shortage. New construction homes are attempting to fill the gap created by the lack of available inventory in the existing home space. Price adjustments and builder incentives are helping to drive this trend.

Overall, builder confidence is an important real estate market predictor because it provides valuable insight into the health of the housing market from the perspective of industry professionals who are intimately familiar with the industry's challenges and opportunities.

Interested in a new build? I work hand-and-hand with many of the local builders and new home communities and can guild and help you find your next dream home. 

Feb. 28, 2023

Here's what's happening in Gilbert, AZ real estate for the last week of Feb 2023

Interesting way to end the month in Gilbert. Statistics are from the beginning of the month to the month's end and are specific to Gilbert. 

The median list price has increased by $34,900.00 since the beginning of the month. 

The median price of new listings increased by $1,010.00 since the beginning of the month.

The price per square is up $2.00 since the beginning of the month.

The average days on the market have declined by 4, and the median has decreased by 14.

The inventory of homes has also declined by 45 homes. 

Questions about your city? Let me know, and I will be happy to provide you with the recent data.