By Frank May, Real Estate Agent
Last month I was talking about how the increase in inventory is slowing and the great news is that I’m still seeing that trend. The time period between 60 days ago to 30 days ago had an increase in inventory of 14.5%. These past 30 days have seen only an increase of 2%, which puts us up to about 19,300 homes for sale on MLS. That slowdown is one we like! Along with that good news is the fact that the homes under contract seemed to have bottomed out at the end of July to around 7,900 and now we have 8,500 homes under contract. So, more people are buying than they were just a couple of months ago.
We have just seen interest rates go up to over 6% and that will have an effect, as it lowers what buyers can be approved for by their lender. We will see how this affects our numbers over the next month, but it should mean inventory will go up a little more and I wouldn’t be surprised to see the number of homes under contract drop a bit. This is good and bad for buyers. Obviously, the higher interest rate stinks. But it means that for most homes on the market, buyers won’t be competing against multiple offers like they were earlier this year. So, buyers are getting more negotiating from sellers.
I’m seeing sellers offering to contribute towards the buyer’s closing costs (meaning buyers are keeping more cash in their pockets) and even contributing towards buying down the interest rate so the buyers can essentially get a better rate and a better price on a home right now. And, if interest rates drop next year like a lot of people are saying they will, they can refinance down to a lower rate. If interest rates do drop next year, then we will be back to more people trying to buy homes and competing against more buyers, which means paying top dollar and not getting the seller to contribute anything. It’s funny how supply and demand works, isn’t it?
Remember, if you are reading this, you live in arguably the best area in the Valley! The area has so much to offer, and people want to live here. I have buyers who want to move here because of our schools, our beautiful mountains, our wonderful shopping and restaurants (shout out to our Upper West Side PHX Facebook group for being the catalyst for bringing in great businesses and for supporting our local businesses), great access to freeways, and more! It truly is a wonderful place to live. And, with the Taiwan Semiconductor Manufacturing Co being so close, we will have more jobs and more people moving to the Upper Westside!
If you ever have questions about our market in general or even specific questions about your neighborhood, you can always contact me or meet for coffee (I love coffee!) and I’ll answer as many questions as you have and talk as long as you can listen about real estate!
Frank May grew up in the Valley, graduating from Northwest Christian School and Northern Arizona University. He is a real estate agent with RE/MAX Fine Properties and has been helping both buyers and sellers for over 20 years. He has been a Dave Ramsey Endorsed Local Provider (ELP) since 2003. Learn more at mayteam.com.