By Mike Bodeen · 10 October 2022
September’s Stats are in. These unpleasant seller numbers are music to the ears of buyers. Unfortunately for buyers, however, mortgage rates are now in the mid 7% range and before the year is out, we may be looking at rates in the eights. Mind you, real estate markets plummeted when we hit the six percent range. 7% or 8% is just kicking the market when it’s down.
September’s ARMLS stats for 10/1/22 compared with 10/1/21:
Active Listings: 20,084 vs 7,649 last year – up 163% – and up 7.4% vs 18,694 last month
Under Contract Listings: 7,358 vs 11,578 last year – down 36.4% – and down 12.6% vs 8,419 last month
Monthly Sales: 6,361 vs 9,377 last year – down 32.2% – but up 0.7% vs 6,315 last month
Monthly Average Sales Price per Sq. Ft.: $277.40 vs $251.87 last year – up 10.1% – but down 3.3% vs $286.79 last month
Monthly Median Sales Price: $439,000 vs $410,000 last year – up 7.1% – but down 1.3% from $444,900 last month
“…there are some listings that will appeal to multiple parties, despite a slowing market.”
If the Fed wants to stop real estate sales and send prices further south, it’s winning that battle. Our economy is an enigma. Our national unemployment rate just dipped to a below pre-Covid subterranean rate of 3.5%. Incomes are up 5% from last year, but high inflation nationally and double-digit inflation in Arizona makes the net, a significant loss. You can do the math.
Buyer’s Moving Into the Driver’s Seat
Our almost weekly exhortation for buyer’s to make a move in the market should become more apparent. Rob, a client of mine called me about a listing in his neighborhood that had been listed for 4 months at $599,000 and was just reduced to $479,000, a $120,000 price reduction!
We may be seeing large price drops like this become more prevalent in the weeks ahead. Buyers are now in the driver’s seat. Aggressive bidding and special buyer terms will become more of the norm.
Above-List-Price Closings
One radical and recent differential in our market has been the reversal of Above-List-Price closed sales. From October of 2013 until February 2020, less than 20% of sales closed above-list-price. 2020 was the year that changed. Just six months ago, 58% of sales closed above list price. We are now back to average.
What this says to me, is that there are some listings that will appeal to multiple parties, despite a slowing market. Professionals understand you can’t paint a broad stroke over every listing. Each stands on its own merits.