By Mike Bodeen · 7 July 2023
But There is a Buyer Silver Lining
First let’s look at the current home resale market. Home prices continue to rise, and it’s getting worse for buyers, however there is a silver lining for buyers which I’ll address shortly.
The June 2023 market stats are below:
Active Listings: 11,545 vs 14,406 last year – down 20% – down 1.6% vs 11,730 last month
Under Contract Listings: 7,858 vs 8,621 last year – down 8.9% – and down 13% from 9,028 last month
Monthly Sales: 7,377 vs 8,113 last year – down 9.1% – down 9.0% vs 8,110 last month
Monthly Average Sales Price per Sq. Ft: $288 versus $300 last year – down 4.2% – but up 1.5% from $283.71 last month
Monthly Median Sales Price: $443,000 versus $474,000 last year – down 6.6% – but up 2.1% from $434,000 last month
The Cromford Report points out that market “comparisons with this time last year are getting easier, as a year ago the market was deteriorating as demand from institutional investors and iBuyers collapsed. A steep rise in interest rates had spooked the market and ordinary buyers were holding their breath too.”
Well, one year later, we have a very low supply market, but it is still less than demand, which is increasing prices for four months in a row.
Rates rose sharply this week and are solidly over 7%. This continues to weaken the entire real estate industry. Realtors, lenders, title companies, home inspectors, appraisers, warranty providers, etc., are all severely impacted. Last week I was in a title office and this week in a lenders office, and it seemed like there had been a bomb threat that cleared these offices.
The new home market however, is fairing better. In Maricopa County, the month of June Affidavits of Value (sales) reports that:
New home sales now have a 22% share of the market. Up from 16% last year.
New home closed sales totaled 1,657 with a median sales price of $519,000.
New home closed sales count was up 8.1% from June 2022.
New home median sales price is up 3.7% from a year ago, and up 2.4% from last month
Buyers are turning to new homes because many of the builders are offering incentives, like mortgage rate buy-downs and less competition from other buyers competing for resales.
Earlier I offered a silver lining for resale buyers in this current marketplace. Here it is: Even though prices are rising, many sellers are more negotiable in price and willing to give incentives to buyers. It may still be hard to get a seller to move much for a home that’s brand new on the market, but once that home’s been on the market longer than even a few weeks, the seller’s position starts to soften.
Remember, sellers who are putting their homes on the market in this market, are very serious about getting the home sold. Be bold. It is still a seller’s market, but nothing like the Covid chaos we have come through.
Market data referenced in this article comes from The Cromford Report.