Jan. 14, 2020
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.
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!
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.