And now, for the traditional look-back at the year that was. How did the Phoenix real estate market fare in 2015? Not too shabby!
In a nutshell, 2015 favored sellers over buyers in most areas, as has been the trend since 2011. The good news for buyers, however, is that sellers can no longer dial it in. There were far more price reductions, more nail-biting, and overall, less partying by sellers and a little more satisfaction in the buying experience. Gone are the days of slowly driving your car by a house, adding $20K to the listing price of some dump that meets 25% of your must-have criteria, and hoping this, your 27th offer, would finally hit pay dirt. Yes, the Phoenix real estate market is a lot more “normal” now. There are still those sweet deals that sell in a weekend, but in general, buyers have more options to choose from and a little more time to bring the family through for a second opinion before writing up and offer.
A Quick Recap
Even though we started the year a little on the sluggish side, here are some key points:
- More homes sold this year than last year – about 10% more homes.
- Homes sold for more money this year than last year – roughly 8% more.
- Homes sold a little faster this year – the number of days on market was down 7%
- Fewer distressed properties were sold – only 7% of all sales right now are foreclosures or short sales.
Yes, things are looking up, but watch those lower price ranges. That entry level price range is rising – it’s really tough to find a decent home for less than $150K in the West Valley or less than $200K in the East Valley. Those numbers are going to notch up this year given our strong start. The gentle increase in interest rates isn’t going to help those first time and returning buyers either. Word of warning, fence-riders. The longer you sit there, the more likely you to remain a renter, K? Don’t say I didn’t warn you!
The Year of TRID
This was the year of TRID, the latest in a string of measures to protect homebuyers from “evil” lenders and bring more transparency to the whole escrow/loan/accounting aspects of the home buying process. The multi-page HUD statement that realtors love by their clients hate (and who can blame them, it’s like explaining the whole transaction in the hardest language on the planet – math) has been replaced by lots of easier-to-understand disclosures and waiting periods. In the long run, buyers are going to be better off because they have a better chance of understanding all the stuff they are signing well before they sign it, but in the sort term, it was like doing real estate in slow motion. We saw that in November with a huge dip in closed sales, but things are catching up and soon, it will be no-big-deal just like every other change in the real estate process.
Looking Ahead to 2016
Coming into 2016, things look pretty sweet, at least if you like a healthy real estate market with rising equity and lots of activity. Inventory is down about 8% from this time last year – 11% less if you only count those homes that don’t have offers on them – and sales volume is up about 12% compared to last January. OK. Not the greatest news for buyers, but trust me, everybody benefits from a healthy market. I remind you once again, this is a far cry from the Phoenix real estate market of 2011 and 2012!