By Frank May, Real Estate Agent
What a difference a month can make! The three i’s—inflation, interest rates, and inventory—are all going in the wrong direction. I don’t know about you, but my expenses have gone up by much more than the 8% inflation that is being reported. Interest rates continue to rise and experts think they are not stopping yet. What about inventory? When I was writing my last article a month ago, we had about 5,200 homes on the MLS and today we have over 8,500. That is an increase of over 60%. That’s a huge percentage increase. The last factors making a negative difference are the drop in the stock market and the drop in the value of crypto currencies. People have lost a lot of money in the past month and that is money some of them would have used to purchase a home. Without that money there will be a group of people who will be taken out of the home buying market and that isn’t good for price increases.
We are hearing that this is the top of the market and, whether it really is or whether this is creating a self-fulfilling prophecy, doesn’t matter anymore if the result is the same—and that is a shift in the housing market. I am feeling that shift because, compared to a month ago, I am not getting the same number of showings, people through my open houses, and offers. So, price increases are slowing down, and the buyer market is shrinking. Will the prices drop? I don’t think so but I’m less sure of that than I have been for a long time. I now think that is a possibility where before I didn’t think it would happen. I thought our price increases would slow. But I also didn’t think inflation would get this bad, interest rates would keep going up, and our financials (stocks/cryptos) would suffer this badly.
Should You Sell Now?
It depends on what your goal is. If you are going to be selling and buying in the same market, then the prices are doing the same thing for the house you own and the house you are going to buy. For example, if homes continue going up and you sell, you get a high price for the home you sell and you’re paying a high price for the home you buy. If homes go down in price, then you sell your home for less but you buy the next home for less. So, if you were thinking of downsizing or upsizing, do it and get to where you ultimately want to be. Plus, the interest rates look as if they are going to be going up so the quicker you do this the better if you are going to be financing your next purchase. If your goal is different, then we should talk about what that goal is and how best it can be accomplished. You can always reach out to me and schedule an appointment by calling me at 623-203-1800 or emailing Frank@MayTeam.com.
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.