Homes For Sale; Is It The Time To Buy?
What is really going on in the real estate market these days? From a Realtor’s point of view investment activity has dropped off sharply in response to rising prices and smaller profits.
So where is the “native” demand to make up for it. Large firms like Blackstone purchased many of the Foreclosure homes that where on the market a year ago. Thankfully there are almost 50% less Foreclosure homes on the market this year. Which means there is a stronger market today; or is there?
As a result of these and other trends, the Phoenix real estate market will likely begin to favor buyers over sellers, as we move into summer 2014.
Inventory within the Phoenix housing market has grown considerably and the median age of inventory ( how long a home stays on the market) has also rose significantly over the last 12 months.
This means homes are taking longer to sell today, compared to a year ago. It’s further evidence that a market shift is underway.
“Institutional investors (such as Blackstone) have largely moved on to other housing markets in the country with more foreclosures and bigger bargains,” said Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School and Webmaster/Creator of the Cromford Report. “Other buyers aren’t rushing in to fill the void.”
So the level of demand that drove prices up has weakened considerably. Meanwhile, the number of homes for sale has risen over the last year or so. Twelve to eighteen months ago, there was a serious inventory crunch across the metro area. Investors and buyers were competing for limited properties. This is what drove prices up so sharply.
What does it all mean? For one thing, it means the Phoenix real estate market is beginning to favor home buyers over sellers. Home buyers had 64% more properties to choose from in April 2014, compared to a year earlier. This dramatic shift of supply and demand should decelerate price growth over the coming months.
As a result of inventory growth and declining demand from investors, home buyers may have the upper hand when it comes to negotiating real estate sale prices.
This is a supply and demand situation. Local housing inventory has grown over the last year. Meanwhile, demand has softened, this means market leverage is shifting from sellers to buyers.
Of course nobody here has a crystal ball or can predict the future, but from a bargaining standpoint, the summer of 2014 could be a great time to buy a house in the Phoenix area.
This article was written in reference to an article found at:
http://www.homebuyinginstitute.com/news/phoenix-market-favor-buyers-550/#ixzz33EvE34wk
