Where have all the real estate deals gone?
There have been a couple of dramatic changes in the Phoenix real estate market in the last few weeks. First, the inventory in the Baseline corridor has disappeared. The number of available real estate deals in the corridor has dropped from approximately 15-20 homes to 3 homes over night!!
Our Keller Williams bank owned property specialist has informed me that in the bank owned arena, there have been significant changes. Our bank owned property specialist was previously listing 20 new properties per week but is now listing 2 new properties per week. Apparently, cash investors with large portfolios are by-passing the traditional real estate market and buying on the county steps at deed of trust sales.
What about properties that are upside down (the value of the home is less than the loan amount)?
Banks are dropping the asking price to an amount closer to market value right before homes are sold. Bank owned properties are also being packaged for multiple property sales.
What does this mean for non-investors who are trying to buy or sell a single property?
Buying a home or selling a home just got a whole lot harder. Foreclosed properties are rapidly disappearing which is stabilizing the bottom end of the real estate market.
If you are looking for a real estate deal, the search just became more arduous. The good news is that phase one of the real estate market turnaround has begun!
By The Numbers
Foreclosure sales (REOs or bank owned properties) have stabilized. The number of "properties for sale" and "sold properties" is nearly equal. Since May, home inventory has been approximately 1 month (meaning, at the current rate of sale, it would take 1 month for the inventory to be completely sold). Short sales continue to be long sales (meaning they take a LONG time to close). The inventory of short sale homes has been constant for 6 months at 12,000, with 1,200 sold per month, causing at least a 10-month inventory of short sale homes.
Is it time to consider selling your home?
Not quite yet. Home values are still down even though we are technically in a seller's market that is being artificially caused by the foreclosure market. For traditional, private sales it is still a buyer's market. There is currently a 7-month inventory of privately listed homes. We will enter a seller's market when the inventory drops below 6 months.
Is it time to buy a home?
Absolutely. I hope you have figured out that the window of opportunity is closing. Not only are the real estate deals (the REOs) disappearing, but the $8,000 first-time home buyers' incentive ends at the end of this year.
What are the next steps to buying a home before all the deals and incentives are gone?
Get yourself pre-qualified with one of our lenders and let's start looking for your next home today!
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