By Amanda Ventura
The housing market always holds its breath during an election year.
Now that the new president is weeks away from inauguration, Phoenicians can exhale a deep sigh of relief. While many experts are predicting a moderate year for housing in 2017, homebuyers and sellers in the Valley can expect a competitive market as hot as the coming summer.
Phoenix is projected by Realtor.com to be the No. 1 market in the U.S. next year. Two generations in particular will be filing change-of-address forms in the coming months – Baby Boomers and Millennials. These groups are entering retirement, becoming empty nesters and starting families, respectively.
“Buyers and sellers should be prepared to see the market heat up with inventory dwindling and demand extremely high in our market,” says Allen Studebaker, real estate professional with HomeSmart Elite Group. Homes will stay on the market 14 percent fewer days (11) than the national average among top metros, according to Realtor.com.
The number of houses on the market is down 3.7 percent from last year, says Studebaker. Meanwhile, sales are up 2.6 percent over the same period.
Another bright spot for our market is the median sales price is up 7.1 percent – to $226,000 – and this should continue to improve as sales remain strong. Sellers still need to be smart before taking advantage of the rising demand when putting a price tag on their property.
“Sellers need to exercise restraint from overpricing their homes based on low inventory as buyers are much more educated on values than ever before,” Studebaker says. “Many websites provide buyers information on home values and they are using it to their advantage when deciding to write an offer. If a home is grossly over-priced based on this valuation, the buyer simply will not write an offer for fear of offending the seller.”
Phoenicians will have to take all this good with a little bad.
“Interest rates have no place to go but up,” Studebaker warns.
Rates have been historically low as the economy and housing market have recovered.
What can you do?
“Buyers should get prequalified and make a decision to purchase before they lose their buying power with higher interest rates and rising home prices,” he adds.