Good morning this morning!
Hot damn! This getting older shit is for the birds! This is not to be confused with how I feel old - but more so the slipping of time. One day your babies are babies and then the next, they're rolling into the house complaining about how such and such at work is a calling-out-sick-worthless-employee! oh joys of adult children! :)
In a flash it'll be Thanksgiving, Christmas and New Years.. then poof! it's Valentine's Day, with a sprinkle of St Patrick's Day then before you know it, Easter!
And as if I was joking! It's going to be Easter in like 22 days?!
I digress...
Suddenly I look up and realize the last time I shared a real estate nugget was October... gonna get better at keeping you informed ;)
Having said that! Just like when Covid showed up, everyone and their mom was wearing masks - there was no missing it! Similarly.... you can't drive around anywhere in Phoenix without seeing endless construction of apartments, townhomes, small rental housing complexes.. - all multi family!
Without knowing anything about anything, it's the closest visial to "supply and demand"... despite high prices on homes, uncomfortable interest rates - shit?! election year at that... there STILL is not enough places to live.
Damn?! Looking at the growth of Surprise... for years! there was only a sprinkled amount of apartments. I can right now think of only three locations that have been the conversational go-to. Now?! hot damn wow!
I get handfuls of people reaching out to me asking if the wave of multi family is bad for our home values and our community. Although I do not want one building directly behind me - I think they are a good sign for what our awesome Phoenix has to offer.
I gently have to remind people that Phoenix is one of the largest cities in the country... ergo the need for apartments... From the looks... we've been unquestionably backed up with a lack of development in the multi family sector. Surprise alone has been filled with nothing but new homes for years. Shit! We were the trackhome mecca back in the early 2000's.. Surprise alone was one of the worst hit foreclosure hot spots in the country.
Don't be surprised! (pun- haha!) this is not just a Surprise thing, it's also not a Phoenix thing - it's a WORLD thing!
Check this shit out! Some juicy nuggets here for you!
Despite the lackluster performance of rents in the past year, the construction frenzy for multi-family rental units shows no signs of slowing down. It's a bit of a head-scratcher for us.
As of January's close, the annual rate for multi-family construction permits is perched at 21,261 units, nearly hitting its all-time high of 21,861. Wrap your head around this—it's almost three times higher than what we saw five years ago across Maricopa and Pinal counties.
Now, the burning question: where on earth are all these potential tenants popping up from?
Inbound migration from other parts of the USA? Absolutely. Inbound migration from other parts of the world? You bet.
But the first option, the natural growth of the existing population through births, is a no-go. Arizona's birth rates are taking a nosedive, following the trend in most developed nations. The baby boomers, the reigning champs in numbers, are gracefully aging, and the new generation isn't planning to fill their shoes entirely. Fertility rates are doing the limbo, and Arizona reported a drop from 67.3 live births per 1,000 women aged 15-44 in 2011 to 55.5 in 2021—a nearly 18% decline. (Burns my shit our data includes 15 year olds?!) While not as drastic as in some areas, it's a concern for the economic road ahead.
Unlike other regions facing an excess housing crisis, Arizona has been spared that particular headache—for now. But picture this: Italy, Japan, Eastern Europe, parts of the USA, and the colossal over-building woe in China, with an estimated 50 million homes twiddling their thumbs. The real estate vibe is shaky in the Middle Kingdom... can you imagine I-10, with all those cars, no one in them??.. China = 50 Million empty houses.... ugh!
So, the success of filling these new homes in Arizona relies heavily on a continuous influx of inbound migration trumping outbound migration. Right now, we've got a steady stream compensating for the natural decline in population due to the grim reaper outnumbering the stork.
Side note—Arizona losing its appeal for incoming folks could spell trouble for the property market. Thankfully, that's not our current predicament, but let's not get too comfy... Multi-family is like the community college to owning a home. You gotta step into it, get your bearings, and then branch out to the next step...
Deets on the next step below!
Check out the data from February 2023 - February 2024..
What this says: As of this morning, within the MLS, looking at Maricopa County only, for active listings regarding all things that require a mortgage to own:
Active Listings:
Regardless of price point: 13,091
Under $1M: 10,591
Under $600K: 7,491
Under $400K: 3,398
Sheesh man!... I'm drawn back to the end of February 2022...
wait for it....
Regardless of price point, in all of Maricopa County.... single family homes: 3,175
Incase you can't read numbers: "THREE THOUSAND ONE HUNDRED AND SEVENTY FIVE"
More nuggets.. .it also shows from Feb 2023 - Feb 2024:
Within the MLS - reaching out a bit passed Maricopa County:
Active listings: 15,921 / increased +2.3%
Under Contract: 8,082 / decreased -6.9%
Monthly Median Sales Price: $430,000 / up +4.9%
Closed Sales: 4,606 / up +2%
Median time on the market: 28 days (vs 7 days 2022?!)
Days of supply (meaning if no homes came on the market how long before it looked like covid shelves): 80 days (vs 16 days of 2022?!)
And the last dose of tangible data numbers..
the gosh damn interest rate!
From our wizards at Mortgage News Daily:
Pulled Tuesday morning (3/5):
Conventional @ 30yrs : 7.09%
Conventional @ 15yrs : 6.58%
FHA: 6.57%
VA: 6.59%
No lack of progress...
But enough about the numbers, I'm a reading words english major, not an analytical math person.... what does all this mean in words, Josh?!
I got you boo!
For the Buyers:
So, first-time home buyers are at the forefront of the real estate dance, especially with many folks choosing to stay put. (Technically speaking, "first time home buyer"= someone who's not owned a home within 5 years) Maricopa County's 3-bedroom apartments are singing to the tune of $2,100 per month, but hold your horses—those starter homes are busting out at $370,000 in Greater Phoenix.
Now, here's the nitty-gritty: 3.5% down on a $370K FHA loan, sellers chipping in around 10 grand, and a nifty rate buy-down. With all that jazz, you're looking at a monthly payment in the ballpark of $2,159 or $2,375. Pinal County's got a sweet deal at $310,000, making it rain with properties under contract or built in the last 5 years. It's a sizzling market!
But wait, there's more! 2024's bringing stability to the housing industry, with a dash of improved affordability. The Federal Reserve decided to be Santa Claus, not raising the Federal Funds Rate and hinting at dropping it thrice in 2024. Mortgage rates did a happy dance, dropping from 7.1% to 6.62% and saving the day for borrowers... but gotta stay on the Mortgage News Daily cause the rate ebbs and flows daily.
Now, brace yourself.. our analytical readers may already have known this... BUT! —each 1% drop in rates means a 9-10% dip in mortgage payments. In December, nearly half the sales involved sellers tossing in a $10,000 concession. Coolidge and Laveen stole the spotlight with crazy high percentages of concessions, mostly in new construction. 2024's looking promising—declining mortgage payments, rising incomes, and a sprinkle of sanity after the wild ride of 2020-2022.
For the Sellers:
The Greater Phoenix is dancing out of the balanced market groove and stepping into improvement territory. But here's the plot twist—the seller's market is still finding its strength, so the golden combo of top-notch condition and a sweet price tag is the key to unlocking offers in a jiffy. And hey, keeping an open mind about buyer concessions doesn't hurt.
January's unveiling some new listings, higher than the previous year but not breaking any records. Inventory's stretching its legs, but it's still 37% below the usual hustle for this time of year. Now, not all cities are vibing with the seller's market anthem. Check out the lineup from the real heavyweights to the cool kids.
Seller’s Markets: Tolleson, Apache Junction, Fountain Hills, and the gang.
Balanced Markets: Tempe, Litchfield Park, Sun City West, and more.
Buyer’s Markets: Cave Creek, Gold Canyon, Queen Creek, and the laid-back crew.
Most cities are finding their rhythm, either making gradual improvements or holding steady. January's sale prices will spill the tea on December negotiations, and with the market doing the cha-cha fueled by lower mortgage rates and seller concessions, we can expect the groove to continue into the first quarter. Second quarter? Brace yourself—it might just get spicy if rates keep doing the limbo.
But wait?! ... it's an election year?! .... Fear not our friends! Chas and I, and Team Orange have been through a couple election years already!...
Cue the drums—it's an election year extravaganza! But here's the scoop: the drama and hoopla around presidential campaigns might make headlines, but they're not the main act for the housing market. It's the policies that follow the elections that steal the show.
What's the script for this year? There's one market that might do a little dance—the stock market. After the past four elections, it's been high-fives all around, impacting luxury buyers and retirees with pockets full of cash. Cash buyers, expecting their portfolios to bloom post-election, might hold off on home purchases until spring.
In 2024, listings over $1M are breaking records, showing off some impressive stats. Active listings in the same bracket are also at record highs, keeping price appreciation stable despite increased demand. Retirement communities, however, are feeling the inflation blues. When life's necessities play hard to get, folks in this segment are clutching onto their cash like treasure. Maybe a post-election exhale is what they need... but that'll have to wait until after November?!
We'll be sure to keep you abreast of those findings fi-sho! :)
Hot damn dude?!... a lot of info in that market update! .. I'd rather hit you once to keep you in line with the details so you remember it! hahah! rather than be cut a million times to where you finch with a sting when you open my emails. hahah!!
We're not like that :) We're a safe place to ask questions without expectation - we have an unfair advantage, we care more.
If you have questions about the informative breakdown we provided, please reach out. If you know someone who'd appreciate this kind of market detail, please share it with them. And lastly, if you or someone you know needs help buying or selling their home, we'd be grateful to help.
I'm beyond humbled and honored that we were once again awarded for our efforts of 2023. Although we might not flex on the happenings of our successes, we are making a dent in the universe with our service to others.
A deep share of gratitude to the love of Team ORANGE and the trust our clients have given us. Thank you Realty ONE Group for recognizing this. :)
Have grateful weekend!
We appreciate you :)
If you ever wanted to live in a cabin, w/a lakeside view, on a private island, in the woods, with a shed!.. I found one... but my guess is that it will NEVER be for sale! LOL!
