The Surprise Arizona real estate market is expected and could do very well this year as mortgage interest rates remain at historic lows. One thing real estate experts are discussing in the housing industry is the lower amount of homes available for sale. Last week, move.com released a report showing that 2020 is beginning with the lowest available real estate housing inventory in two years. The report explains:

“Last month saw the largest year-over-year decline of housing inventory in almost three years with a dramatic 12 percent decline, pushing the number of homes for sale in the U.S. to the lowest level since January 2018.”

The report also revealed that the decline in inventory stretches across all price points, as shown in the following graph:

George Ratiu, Senior Economist at realtor.com, explains how this drop in available homes for sale comes at a time when more buyers are expected to enter the market:

“The market is struggling with a large housing under supply just as 4.8 million millennials are reaching 30-years of age in 2020, a prime age for many to purchase their first home. The significant inventory drop…is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.”

The question is: What does this mean to you?

If You’re a Buyer…

Be patient while searching for a home. It will and may take time to find a home you love. Once you do, however, be ready to move forward. Get pre-approved for a home loan, be ready to make a competitive offer from the start, and understand that if more of a shortage in inventory could lead to the resurgence of bidding wars.

If You’re a Seller…

Depending on the area that you are selling in, realize that, in some ways, you’re in the driver’s seat. When there is a shortage of an item at the same time there is a strong demand for that item, the seller of that item is in a good position to negotiate. Whether it is price, moving date, possible repairs, or anything else, you’ll be able to demand more from a potential purchaser at a time like this – especially if you have multiple interested buyers. Don’t be unreasonable, but understand you probably have the upper hand.

Bottom Line

These numbers are general, they are not for every market, and not for ever neighborhood.  We can help you decide what the impact is on your home/neighborhood.

There’s a current narrative that owning a home today in Phoenix AZ is less affordable than it has been in the past. The reason some are making this claim is because house prices in Phoenix have substantially increased over the last several years.

It’s not, however, just the price of a home that matters.

Real Estate in Phoenix AZ, in most cases, are purchased with a financing with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by over a full percentage point since December 2018. Another major piece of the affordability equation is a buyer’s income. The median family income has risen by approximately 3% over the last year. In Arizona the Department of numbers shows +3.68% for Phoenix 1 year change, and +11.20% in the last 3 years.

The National Association of Realtors (NAR) releases a monthly Housing Affordability Index. The latest index shows that home affordability is better today than at almost any point over the last 30 years. The index determines how affordable homes are based on the following:

“A Home Affordability Index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index of 120 signifies that a family earning the median income has 20 percent more than the level of income needed pay the mortgage on a median-priced home, assuming a 20 percent down payment so that the monthly payment and interest will not exceed 25 percent of this level of income (qualifying income).”

The higher the index, therefore, the more affordable homes are. Here is a graph showing the index since 1990:

Obviously, affordability was better in Phoenix Arizona during the housing crash when distressed properties – foreclosures and short sales – sold at major discounts (2009-2015). Outside of that period, however, homes are more affordable today than any other year since 1990, except for 2016.

The report on the index also includes a section that calculates the mortgage payment on a median priced home as a percentage of the median national income. Historically, that percentage is just above 21%. Here are the percentages since June of 2018:

Again, we can see that affordability is much better today in Arizona than the historical average and has been getting better over the last year and a half.

Bottom Line

Use all the resources you can find, and make an educated decision on market conditions, prices, home values.  Call or email us anytime if you have any questions.  

By the end of last year, many homeowners in Arizona found themselves with more equity than they thought they had, and they have been seeing wages increase. When those two factors unite, it can spark Arizona homeowners to think about making a move to a larger or more expensive homes in the luxury real estate market. That said, now is a perfect time to take a look at the forecast for the 2020 luxury market in Arizona.

1. Prices

The U.S and Arizona economy  is strong these days, with buying opportunities throughout the Arizona luxury end of the market. Thomas Veraguth, Strategist at UBS Global Wealth Management, says in Barrons.com,

“There’s a good link between luxury real estate prices and [economic] growth.”

Available inventory in the luxury real estate market,  is a key element that can impact home prices. At the upper price range, the inventory is greater in comparison to the entry-level market homes in the low to mid 200's, making moving up to a luxury home in Arizona a growing reality for many buyers in Arizona right now.

2. Activity in the Market

With more buying opportunities at the higher end of the home prices, we should start to see an increase in activity. The same article states,

“Affluent home buyers will start to come out of the woodwork as they find rising luxury rents less appealing and sellers get even more negotiable on price.”

Home buyers looking in the Arizona luxury market are taking the opportunity to negotiate on price, and other seller concessions in a segment where there are more choices, too. According to the Luxury Market Report, homes sold for an average of 96.94% of the list price in December.

Buyers are also getting more for their money with greater purchasing power due to the current low interest rates. Today January 2020,  30 year fixed interest loans are around 3.7 percent. 

3. Buyers Are Coming Back

Also something to consider, buyers are often sellers too, especially those looking to move up. Phoenix Az homeowners with an entry-level home can take advantage of the inventory shortage at the lower end of the market, thus driving higher sales prices for their current homes. Combined with growing equity in the homes they’re listing, it’s a great time for those who are ready to make a luxury move.

The extra equity and greater purchasing power are bringing many buyers back to the Arizona real estate market. The same article mentioned that,

“We’ve already seen buyers who’ve been on the sidelines for two years tread back into the market.”

4. Real estate Market going up or down in 2021?

Yes! That is the correct answer.  The Arizona real estate market is going up or down. We have no way of 100% predicting the future.  Keep your monthly payment affordable.  This will ensure a market correction, change, or recession will not hurt so bad or at all.  Many people that weathered the last real estate recession ,are the ones moving up right now.  They finally have a great opportunity to take the equity and move up!

Bottom Line

If you’re considering entering the luxury market in Arizona, 2020 is setting up to be a great year for those who are ready to make that move. Let’s get together to set your real estate plan for the year.

According to an Urban Institute study, homeowners who purchase a house before age 35 are better prepared for retirement at age 60.  Arizona is a great place to purchase a home early,  median price ranges are significantly lower than cities like San Diego.  

A fantastic area to retire in is Surprise Arizona,  Retirement homes in Sun City Grand are a popular choice.

The good news is, current younger generations are believers in home ownership.  The study also shows that most of today's elder owners made a home purchase prior to being age 35.

According to a Freddie Mac survey,

“The dream of home ownership is alive and well within “Generation Z,” the demographic cohort following Millennials.

Our survey…finds that Gen Z (born between 1995 and 2015) views home ownership as an important goal. They estimate that they will attain this goal by the time they turn 30 years old, three years younger than the current median home buying age (33).”

When and if Gen z aspiring homeowners purchase at an early age, the Urban Institute study shows the impact it can have.

 

Based on this data, those who purchased their first homes before the age of  25 had an average of $10,000 left on their mortgage at age 60. The 50% of buyers who purchased in their mid-20s and early-30s had close to $50,000 left, but traditionally purchased more expensive homes.

Although the vast majority of Gen Zers want to purchase and own a home. They are somewhat confident in their future, “In terms of financial awareness, 65% of Gen Z respondents report that they are not confident in their knowledge of the mortgage process.” and that is not uncommon in any of the generations when they were first time home owners.

Bottom Line

Looking at the data, younger generations are not alone not knowing the mortgage/home purchasing process.  Feel free to contact us! And you can get a head start on learning about the real estate purchasing process. 

What are you doing today to cut energy costs? 

It is National cut your energy costs day. Set up to bring awareness to consumers. So you can explore your options. Also to do routine maintenance on your home to cut costs.

 Things I have done in the past to cut energy costs, I don't recommend you do these yourself.  Maybe use a contractor or if you are handy go for it. 

• Updated my appliances to energy star
• Caulked my windows with clear caulk around the outside to keep the drafts away.
• Took down all of my A/C registers and sealed them.  
• Sealed all the holes and cracks around the a/c filter.
• Put outlet gaskets in all the electrical outlets that are on exterior walls
• Wrapped my water heater in a insulated blanket
• Replaced my electric clothes dryer with a gas dryer
• Installed a ducted Evaporative cooler
  • This keeps my house cold until around July 4th to 8th then I move to A/C
• Replaced every light bulb in the house with LED bulbs
• Put on a programmable thermostat and thermo-cool the house during non peak hours
• Added insulation to the attic

I can get into home projects, so most of these were small projects.  The big project was the evap cooler.  It is not like a traditional setup where it blows out of a giant duct/hole in the hallway.  The Evap unit is now ducted into the a/c ducts and keeps all the bedrooms cool.  This only works in some cities where the humidity is lower.  A friend of mine in buckeye AZ, did a similar set up. His home does not get as many dry enough days per year, but it still saves him a lot of money.  So far the in Surprise AZ, the climate is dry enough for an evap cooler to save energy.  

 It is amazing how much energy you can save if you track your usage.  I started with a big electric bill, unplugged the air compressor in the garage, and the numbers went down.  Then it became a game.  I would try unplugging cordless drill chargers that I left on full time in the garage.  Removed the alarm clock and use my cell phone as an alarm clock. All these little things add up.

According to current research, January 2019 was only 1% behind February for the most monthly views on real estate listings on realtor.com.

The busiest season in Phoenix real estate has just begun. Buyers in Arizona are starting to look.

Some researchers indicate,

“Historically, April launched the kickoff of the home shopping season as buyers would come out of their winter hibernation looking for their new home. However, the spring shopping season now starts in January for many of the nation’s largest markets.”

According to research we should start seeing more homes get listed as we move toward spring.

Also, Researchers also stated that the strong economy is one reasons why housing demand will remain strong in 2020.

George Ratiu, Senior Economist at realtor.com says,

“As shoppers modify their strategies for navigating a housing market that has become more competitive due to rising prices and low inventory, the search for a home is beginning earlier and earlier.”

With speculation in the Phoenix AZ real estate market about why the search for a home is shifting to an earlier start. The one thing we can consider is if you’re thinking about buying or selling a home this year, the earlier you get started, the better.

When should you sell something in Phoenix? When there is less of that item for sale and the greatest number of buyers are in the market. That’s exactly what is happening in Arizona real estate right now. according to researchers. 

If you’re following what’s happening in the Phoenix AZ housing market right now, you know that many people believe the winter months aren’t a good time to sell a home. As realtor.com Senior Economist George Ratiu recently noted,

“Sellers tend to be more reluctant to list during the colder time of year when the market typically makes a seasonal slowdown.”

However, a recent report by ShowingTime shows how this year is different that previous years. Buyer activity is way up in Arizona and surrounding western states compared to the same time last year. The report explains,

“The nation’s 12.6% growth in home showings compared to 2018 was the most significant jump in buyer traffic during the current four-month streak of year-over-year increases. The West Region saw the greatest growth in activity, with a 23.1% jump – the region’s greatest in the history of the Showing Index.”

Arizona is not the only market seeing more activity, an increase has spread across all four regions of the country, as the graph below shows:

Bottom Line

The new spring market for Arizona real estate is underway. If you’re considering buying or selling, let’s connect, so you have the advantage in this competitive market.

You can find homes in one of the popular areas in surprise, homes for sale in Surprise Farms. We can search for homes and make favorites to look at later, or ask us to schedule showings.

This will be an interesting year for Phoenix real estate. With a presidential election taking place this fall and talk of a possible recession occurring before the end of the year, predicting what will happen in the 2020 U.S. housing market can be challenging. As a result, taking a look at the combined projections from the most trusted entities in the industry when it comes to mortgage rates, home sales, and home prices is incredibly valuable – and they may surprise you.

Mortgage Rates

Projections from the experts at the National Association of Realtors (NAR), the Mortgage Bankers Association (MBA), Fannie Mae, and Freddie Mac all forecast mortgage rates remaining stable throughout 2020:

we have right now.

Here are the average mortgage interest rates over the last several decades:

• 1970s: 8.86%
• 1980s: 12.70%
• 1990s: 8.12%
• 2000s: 6.29%

Home Sales

Three of the four expert groups noted above also predict an increase in home sales in 2020, and the fourth sees the transaction number remaining stable:

With mortgage rates remaining near all-time lows, demand should not be a challenge. The lack of available inventory, however, may moderate the increase in sales. Check out homes in Phoenix for sale,  we have plenty of inventory to pick from.

Home Prices

Below are the projections from six different expert entities that look closely at home values: CoreLogic, Fannie Mae, Ivy Zelman’s “Z Report”, the National Association of Realtors (NAR), Freddie Mac, and the Mortgage Bankers Association (MBA).

Each group has home values continuing to improve through 2020, with four of them seeing price appreciation increasing at a greater pace than it did in 2019.

Is a Recession Possible?

In early 2019, a large percentage of economists began predicting a recession may occur in 2020. In addition, a recent survey of potential home purchasers showed that over 50% agreed it would occur this year. The economy, however, remained strong in the fourth quarter, and that has caused many to rethink the possibility.

For example, Goldman Sachs, in their 2020 U.S. Outlook, explained:

“Markets sounded the recession alarm this year, and the average forecaster now sees a 33% chance of recession over the next year. In contrast, our new recession model suggests just a 20% probability. Despite the record age of the expansion, the usual late-cycle problems—inflationary overheating and financial imbalances—do not look threatening.”

Bottom Line

Mortgage rates are projected to remain under 4%, causing sales to increase in 2020. With growing demand and a limited supply of inventory, prices will continue to appreciate, while the threat of an impending recession seems to be softening. It looks like 2020 may be a solid year for the real estate market.

Outside of a strong economy, low unemployment, and higher wages, there are three more great reasons why you may want to consider buying your dream home this year instead of waiting.

1. Buying a Home is a Great Investment

Several reports indicate that real estate is a good investment, topping other options such as gold, stocks, bonds, and savings. Why? Real estate helps build equity, a form of investing for you and your family. According to CoreLogic’s Equity Report,

“U.S. homeowners with mortgages (roughly 64% of all properties) have seen their equity increase by a total of nearly $457 billion since the third quarter 2018, an increase of 5.1%, year over year.”

This means the average homeowner gained approximately $5,300 in equity over the past year. If you want to start building your equity, put your housing costs to work for you through home ownership this year.

2. Mortgage Interest Rates Are Low

The Primary Mortgage Market Survey from Freddie Mac indicates that interest rates for a 30-year mortgage have fallen since November 2018 when they hit 4.94%. In their latest forecast, Freddie Mac expects rates to remain low, leveling out to a yearly average of 3.8% in 2020.

When you purchase a home at a low mortgage rate, it will impact your monthly mortgage payment, giving you the opportunity to buy more house for your money.

3. Investing in Your Family is a Win

There are some renters who haven’t purchased a home yet because they’re uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you’re living rent-free with your parents, you’re paying a mortgage – either yours or that of your landlord.

Today, rental prices continue to increase, and when you’re paying your landlord’s mortgage instead of your own, you’re not the one earning the equity. As an owner, your mortgage payment is a form of ‘forced savings’ you can use later in life to reinvest in your family. You can use it for a variety of opportunities, such as saving for your children’s education, moving up to a bigger home, or starting your own business. As a renter, it can be more challenging to achieve those types of dreams without home equity working for you.

Bottom Line

Buying a home sooner rather than later could lead to substantial savings and long-term financial growth for you and your family. Let’s get together to determine if home ownership is the right choice for you this year.

try our free home search, Homes for sale in Phoenix AZ

Happy Trails Resort and Retirement Community

You’ve worked hard all your life, and you’re finally ready to reap the rewards you deserve. Travel, golf, and year-round sunshine make for a happy retirement, and it’s easier than you think to make it happen. The “snowbird” RV lifestyle is both affordable and flexible, allowing you to follow the weather, and stay as long as you like.

The premier snowbird destination in the United States is Arizona, and the Happy Trails Resort in Surprise AZ has a lot to offer. Happy Trails Resort is a well established gated community that caters to people 55 years old and older. The community offers a flexible lifestyle for those who wish to travel and retire in style. The community has many resort-style amenities, and you’re free to rent or buy an RV lot to spend the winters in comfort. The resort lifestyle at Happy Trails is both flexible and affordable.

Nestled in the northwest corner of the Phoenix metropolitan area, Surprise is one of the best small cities in the Phoenix area; it’s safe, clean and has high scores for shopping, entertainment, and medical care. 

An RV lot at  is more than a simple slab of concrete with hookups; An RV lot requires that a recreational vehicle is parked on the lot whenever it’s occupied, but it also allows for another living space. You’re free to build an Arizona room, a storage shed or a workshop on the lot. Lot ownership means you have Arizona residency as well as a home-base. It makes spending your winters in sunny Arizona very comfortable. And if you wish to spend the summers in a cooler climate, you can rest assured your Arizona home base is safe, with Happy Trails 24/7 security patrol.

Happy Trails Resort Surprise AZ is an easy golf cart drive to the adjoining Great Eagle Golf Course. Likewise, the community is right next door to the Arizona Traditions Golf Course and a short drive to the Sun City Grand golf course. There’s a lot more than golf here too; Happy Trails Resort has an Olympic-sized swimming pool, hot tub, sauna, tennis courts, a fitness center and a whole lot more. This is not an RV park; it’s not for overnighters, it’s a secure community for snowbirds who wish to own property. 

You’re free to securely pursue your dreams when you buy property in warm and friendly Happy Trails Resort, in sunny Surprise AZ.