Blame it on the Builders

The Phoenix real estate market has changed considerably since last year - from a HOT SELLERS MARKET with only 7,000 active listings, to a BUYERS MARKET with over 40,000 active listings. What does that mean? That there are more homes for sale and buyers have many to choose from. Only the homes priced competitively and looking their very best will sell - and leave the rest in the dust.

But who is kicking everyone's butt?? The NEW HOME BUILDERS!! They saw an awesome year last year, with waiting lists and lotteries - people actually camping out over night for a chance to grab one of the few lots released. But the market changed - for numerous reasons - and now they have many 'spec' homes. "Spec" homes are homes that have already been built or soon to be finished - and the builder needs to get rid of these homes PRONTO. So what do they do?? They offer amazing incentives - $25,000 in upgrades, some places even offered to $50,000 in upgrades. Now they are going past that and DROPPING THE PRICES. Dropping the prices WELL BELOW what regular home sellers in the area are selling the same home for. I have seen homes that were being sold just a few months ago for $370,000 now being sold for $300,000. YES, ITS TRUE!! Brand new never lived in homes. How can the poor 'single home owner' compete? Honestly, they really can't and that is why they are hurting - and hurting very bad.

This affects the area values, too. When those homes sell at those low prices, the appraisals for other homes get affected, too. If you are trying to sell a 1900 sq ft home for $250,000 but the builders are selling 2100 sq ft homes for $225,000 - what can you do? Any lender will look at that and it will affect the future appraisal of homes.

Some sellers - those who need to sell and have the room in the equity of their home are dropping their prices, too. They are not making the same money that they would have made 3 or 6 months ago. But what can you do? They need to sell.

Those that don't 'need' to sell are taking the home off the market - waiting this 'selling frenzy' to pass - or are renting them out until the frenzy is over. Why the selling frenzy? Many reason but one of them is the investors that came and gobbled up the homes last year are selling them now.

Phoenix metro still has the growth - 375 new people, net, move to the Valley each day! But it will take some time to move the inventory of homes before prices start going up steadily. Some estimate about 18 months.

My advice? If you don't NEED to sell, don't sell now. Wait.... Don't follow the herd.

If you MUST sell? Be realistic about the price - look at the recently sold homes and price below that - and take a look at what builders in your area are selling, too. And be realistic about the time it will take to sell it. Long gone are the "sold in one week" homes. Average selling time is about 90 to 120 days - if priced right from the beginning and marketed correctly.

A yard sign and input into the MLS won't just cut it anymore. You need National, Local, and Neighborhood Exposure - and don't forget the all important WEB EXPOSURE. With over 80% of all buyers turning to the NET before starting to buy, you need to make sure your home is all over the net. A truly TECH SAVVY agent will help with that - a tech savvy agent like yours truly :).