By Frank May, Real Estate Agent
I think we’ve finally reached a point that the temperatures are hotter than the real estate market! And that’s a combination of temps getting higher and the real estate market slowing down.
It has been two months since the last issue of The Upper Westsider and things did keep changing over those 60 days. In my last article, the inventory had gone up from 5,200 active homes to over 8,500 in about a month. In these past two months the numbers kept rising like the summer temps. We are currently right at 16,500 active homes on MLS.
The good news is that for the past few days we have held steady right around 16,500. This is the shortest of time frames but good to see as we have been going up so fast every day. A few days at the same number stands out as a good thing.
One piece of positive/negative news is the Fed is currently looking at only a .75% increase in rates versus the 1% that was expected. It seems kind of like being excited that gas is only $4.50/gallon because it was just over $5. But, not too long ago, it was $2.
Are they playing psychological games with us? Maybe, but I’ll still choose to be happy with .75% versus the 1%. The bottom line is rates will go up and that will hurt the buying power of home buyers. If a buyer was purchasing a home for $750,000 and putting 10% down, a change of .75% interest rate would increase their payment by $331/month. To keep that same payment for the $750,000 you would have to lower your price range to $694,000. A drop in $56,000 of your purchasing power in a matter of minutes.
This is one reason buyers are wanting to get a home under contract right now. They have seen their pre-approved loan amount drop over the past months because of interest rate increases and they don’t want it to keep happening.
Also, the homes under contract have been decreasing over the past few months and that decrease has slowed over the past few weeks. That is a good sign for our market.
I’ll end this month’s article the same as last month’s because it is the number one question I’m still getting from everyone––should I sell now? It still depends on your goal. It is very different for different people, and I’d love to talk to you about it. You can always give me a call on my personal cell at 623-203-1800.
I will say if you are thinking of selling in the next six months to a year, it is probably better to do it now as opposed to waiting. As a seller, you have made the majority of your equity over the past few years, so any increase from here will be slow.
As strange as it seems, there was a time when I first started as a real estate agent that homes would increase 3 to 4% a year and that was normal! Crazy, right? In these past few years, you’ve had months where your home value increased 10%-plus in a month! And you have had multiple months like that.
And don’t worry if you think you are asking dumb questions, I can almost guarantee that multiple homeowners have had the same question. Do I need to paint the Pepto-Bismol color room? Replace flooring that doesn’t match other flooring? Remove fixed items that I want to take with me when I sell…and so many more! So, give me a call and let’s talk.
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.