By Sean Colón
The Arizona real estate market in 2024 has proven to be a unique landscape for both buyers and sellers, marked by fluctuating mortgage rates and shifting market dynamics. Whether you're a realtor working with buyers or sellers, understanding the current conditions and adapting your strategies accordingly can make all the difference. Let's dive into some expert advice and real numbers to help you navigate these changes effectively.
Image via Cromford Report, May 2024
For Buyers: Opportunities Amid High Mortgage Rates
As of 2024, stubbornly high mortgage rates have continued to suppress demand, leading to a less competitive spring buying season. However, this scenario presents unique opportunities for active buyers.
Higher mortgage rates have resulted in:
Less Competition: With fewer buyers in the market, there's less pressure to engage in bidding wars.
More Accommodating Sellers: Sellers are more willing to negotiate, making it easier for buyers to find favorable deals.
Extended Market Time: New listings are lingering on the market five days longer than last year.
Increased Price Reductions: Weekly price reductions have surged by 63%.
While mortgage rates peaked at 7.5% in April, they have since decreased to 7.1% as the job market stabilizes. Industry leaders, including the Federal Reserve, Fannie Mae, and the Mortgage Bankers Association, anticipate rates to decline further to 6.4% by the end of 2024. If these predictions hold true, we could see a resurgence in buyer demand, potentially making summer the new peak season for home buying.
For Sellers: Adjusting to a Balanced Market
The Greater Phoenix market has transitioned to a balanced state, shifting away from the extreme seller's market of 2021 and 2022. During those years, homes often sold "as is," despite needing significant repairs or updates. By 2023, the market softened, and sellers began to encounter more negotiations and allowances for property conditions.
In 2024, with supply up 44% over last year and comparable to pre-pandemic levels (yet still 27% below normal), sellers face a more balanced or even a buyer's market in some areas. Demand remains suppressed by high mortgage rates, 20% below normal levels. These conditions have led to longer marketing times and a notable increase in canceled listings.
To thrive in this market, it's crucial for sellers to:
Prepare Homes for Sale: Ensure homes are move-in ready before listing. Buyers are less inclined to accept allowances for repairs or updates when there are competing, turnkey properties available.
Focus on Presentation: Invest in necessary repairs, fresh paint, and new carpets before the first showing to minimize time on the market.
Adapt Pricing Strategies: While the goal may not be to increase the sale price, the priority is to ensure the property sells. Well-prepared homes are more likely to attract offers and close successfully.
In today's Arizona real estate market, both buyers and sellers must adapt to changing conditions driven by fluctuating mortgage rates and shifting supply and demand dynamics. For buyers, the current environment offers unique opportunities with less competition and more negotiating power. For sellers, preparing homes meticulously and setting realistic expectations are key to navigating the balanced market effectively. Staying informed and adaptable will be essential for success in 2024 and beyond.
By leveraging these insights and strategies, realtors can guide their clients confidently through the complexities of the Arizona real estate market, ensuring successful transactions and satisfied clients.
By the way, I help realtors improve their online presence by providing beautiful photos of their listings. That is why I’ve created this FREE HOME PREP LIST for your clients to help your listings look their best. Feel free to share.