Despite current housing market challenges, the American dream of homeownership remains very much alive. Even so, the Phoenix real estate market is changing rapidly. The most recent Cromford Report Index demonstrates this, as do the top Google searches related to Phoenix real estate. With so many changes taking place, it can be difficult to keep track of the housing market’s current state.
The lack of inventory was one of the key contributors to the run-up in home prices and the competition that buyers felt over the past two years. With the rapid increase in homes being listed over the past few months, sellers have had to get creative to compete for offers from a buyer pool that has shrunk in response to an increase in interest rates. Both potential buyers and sellers want to be well-informed so that they may make sound decisions on a potentially life-changing purchase or sale. So, what are they most concerned about? Trevor Halpern, J.D., the No. 1 independent agent at North&Co. and CEO of Phoenix-based Halpern Residential, had his marketing team pull the top Google searches related to Phoenix real estate and answered each one. They include:
1. What is my house worth?
Automated valuation systems are oftentimes what people rely on to get a sense of the value of their home. Think Zillow “zestimate” or similar products. The problem with such products is that they rely on algorithms, not actual human analysis. An excellent way for you to find the value of your home is to have an experienced real estate agent visit your home in person and provide you with comps after the visit. The visit will allow them to view your home, soak it in, and then go back to their office and run comps based on what they saw and felt in person. Running comps is as much of an art as it is a science and good agents will analyze not only what similar homes in the area are selling for, but how they think potential buyers will emotionally respond to your home. After all, buying a home is a mix of logic and emotion for buyers and the emotional quotient is something that automated valuation systems cannot account for. Ultimately, the VERY best way to see what your house is worth is to list it on the open market and see what a buyer is willing to pay for it.
2. How do I sell my house fast?
In any home sale, price is the absolute most critical component that will dictate the speed of the sale. As I like to say, the pricing continuum in real estate is irrefutable: Price too high and you can expect little to no activity and no offers. Price in line with comps and you are likely to get good activity and potentially an offer. Price below the comps and you will likely sell quickly and with the potential for multiple offers, which could push your sale price above comps. Overpricing is the number one factor that can extend your listing period. Price can fix any issue you have with your home. For instance, if it needs a coat of paint, price it accordingly. The pool needs to be resurfaced, price the home accordingly. The roof is shot, price that in.
3. Is my house losing value?
The true realization of value in your home only takes place when you sell the home and have the check in your hand. So, if you are watching Zillow estimates and the number is going down but you don’t plan on selling, the numbers are not meaningful. For those who are considering selling, as of late, you may have seen a small dip in the value of your home on automated valuation systems. If you purchased your home over a year ago in the Phoenix area, this small dip is not enough to offset the gains you’ve seen since purchasing. Year-to-date, we’ve seen about 9% appreciation across the valley. If you’ve owned for a long time, your home is almost undoubtedly worth far more than you paid for it. Don’t get too hung up on weekly or monthly changes. Only get concerned with value when you decide to sell, and when you do decide to sell, rely on a trusted agent for an opinion of value, not just what the computers say.
The best way to find out how much house you can afford is to talk to a lender. They must factor in your credit, your debt-to-income ratio, and more. Your best bet is to speak with a seasoned mortgage banker that comes recommended from your agent or a trusted friend/family member. The internet is ripe with traps that will sell your information to lenders looking for leads. Not all lenders are created equally and “teaser rates” can oftentimes cost you more in the end. You are looking for knowledge and partnership in a lender as they can help you structure a loan that is best for you in the long run. I would love to connect you with one of my trusted lender partners who will help you determine what price point you can start shopping for, no strings attached. Buyers are having great success in this market without as much competition out there.
5. Can I still buy a house?
Not only can you still buy a home, but right now, buyers have an extraordinary opportunity to negotiate a good deal with sellers and have far more homes to choose from. Interest rates are still below historical norms, so affordability is still likely, depending on how you qualify with a bank. The best way to see if you can still purchase is to speak with a trusted loan professional. Don’t know any? Call a real estate agent you trust and ask them for an introduction. Agents work with lenders they know treat their clients well and who get the job done.
While the housing market can be unpredictable at times, there are some fundamental points that you can consider in order to ensure success. Keeping the above information in mind will ensure that, whether you are buying or selling, you get the best deal possible.
Author: Trevor H. Halpern, J.D. is the #1 independent agent at Phoenix-based North&Co. and the CEO of Halpern Residential. As a Phoenix native, Halpern’s deep knowledge of both people and property has allowed him to create client success in all areas of town. A graduate of ASU’s College of Law, Halpern prides himself on delivering high-level strategy, efficient negotiations, and precise tactical execution. Since 2011, Halpern has sold over $130 million in real estate and has been in the top 1% of real estate agents in the Greater Phoenix area.