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Updated: April 24, 2024 @ 2:42 pm
This 3,919-square-foot house on W. Yellowstone Way in South Chandler recently sold for $1.65 million. With four bedrooms and three-and-a-half baths, the home, built in 2002, boasts a waterfront lot with a fireplaces inside and in the backyard, a heated pool and numerous other amenities. (Special to SanTan Sun News)
This 3,919-square-foot house on W. Yellowstone Way in South Chandler recently sold for $1.65 million. With four bedrooms and three-and-a-half baths, the home, built in 2002, boasts a waterfront lot with a fireplaces inside and in the backyard, a heated pool and numerous other amenities. (Special to SanTan Sun News)
Valley homebuyers may not realize it, but most of the Phoenix Metro region is tilting in slightly their favor – though not so much in Chandler, at least for now.
New indicators published by the Cromford Report, a leading analyst of the Valley housing market, show that only three of the metro area’s 17 municipalities are considered buyers’ markets: Tempe, Paradise Valley and Cave Creek.
“Overall the situation is deteriorating for sellers, though they still have the advantage in most locations,” the Cromford Report said. “One exception is Queen Creek, which we would classify as balanced.”
Yet, Chandler still sits atop that list of 17 municipalities that the Cromford Report regularly analyzes.
Its assessments are based on a variety of factors that, when taken together, indicate whether an individual city or town is a sellers or buyers market or if it is balanced.
The higher an index score goes above 100, the more that market is favorable to sellers. Any score below 100 shows conditions are more favorable to buyers.
“The current trends in the market are lessening the negotiation advantage for sellers and probably making them just a little nervous.”
Chandler ranks the best for sellers with an index score of 246 – but that represents a 20% decline from the advantage they had last month, according to the Cromford Market Index.
The Cromford Report said Valley housing data suggests the market “still has a long way to go before we arrive at a balanced market.”
But it added, “Each day it moves lower (and) strengthens the borrowing power of buyers.”
For months, the Cromford Report and other experts have painted the Valley’s housing market with the same gloomy brush that extends across much of the country.
The two main culprits have been mortgage interest rates hovering around 7% and historically low inventory.
In recent weeks, however, the latter factor has seen slight improvement. The Cromford report said inventory has been inching upward.
“Active listing counts have started to rise significantly over the past two weeks,” it reported last week. “New listings are still scarce, but they are less scarce than a month ago.”
Butch Leiber, president of Phoenix REALTORS’ board of directors, said days on the market for Chandler homes have fallen from an average 72 in April to 56 in August.
He said inventory in Chandler this summer was down 35.7% from a year ago, though it climbed by 500 homes from July to August.
Leiber also had an encouraging word for sellers, stating. ““We’re seeing stability in the percentage of list price received. It’s been holding at higher than 98% of the asking price over the same five months and nearly 99% the last two months. In August, it was slightly higher than one year ago.”
The median. sales price for a single-family home in Chandler in August was $528,750 but the average sales price for that month was higher – $614,935 – Leiber said.
Listings Valley-wide were around 7,100 last month, the Cromford Report said. That was higher than late July’s count of 6,486 – but well below the normal 10,000 listings the Valley usually sees this time of year, it added.
The reason for that increase may offer small comfort to people looking for a home – or selling one.
“When the 30-year fixed mortgage rate stays above 7%, demand for re-sale homes is so feeble that it is not even enough to eat up the small number of new listings that appear each week,” it said. “Available supply is starting to grow.”
“When the 30-year fixed mortgage rate stays above 7%, demand for re-sale homes is so feeble that it is not even enough to eat up the small number of new listings that appear each week,” it said. “Available supply is starting to grow.”
It also reported, “The new home market continues to show more strength than the re-sale market, particularly in volume. However, the new home sales mix moved sharply toward cheaper homes between July and August, causing the median to drop dramatically by more than 6%.
“This was not caused by home builders lowering prices. It reflects smaller homes closing during August and fewer large luxury homes closing escrow. This is not an unusual occurrence for August but the scale of the change is larger than we usually see.”
The latest available data comprised August sales figures, which showed the median sales price for new homes last month was $499,990 – down 2.4% from August 2022 and down 6.3% from July of this year.
Re-sale home prices in August had a median of $445,000, which was unchanged from the previous month and down only 1.1% from August 2022, the Cromford Report said.
The overall median sales price for homes in. the Valley was $459,076 in August, which was down less than 2% from the previous month as well as from August of last year.
But prices won’t likely be plummeting, the Cromford Report warned.
“With the 30-year fixed mortgage rate still north of 7%, qualified buyers are thin on the ground,” the Cromford report added. “Sellers are also scarce.”
“At the moment supply is down more than demand is down, so prices are firm,” it said.
“Without a large and prolonged increase in sellers, we won’t have the lop-sided market that causes prices to fall. We do have a small increase in supply compared with last month, but we are still down 36% from this time last year.
“If supply continues to grow at 6% or more for six months or more, then we could get back close to a balanced market, but at the moment we are seeing just the usual seasonal pattern.”
Neverthless, the Cromford Report said buyers who can afford to be in the game, should stay and look to purchase a home now.
“While admittedly there is a large swath of buyers priced out of purchasing a home due to mortgage rates between 6.8%-7.5%, there are a number of them who have the means to enter the market but are waiting for mortgage rates to decline,” it said.
“Their mindset is not unlike those buyers who waited for prices to come down when rates were below 3% 2 years ago, and now regret it.
“Waiting for the perfect home, at the perfect time, at the perfect price and the perfect mortgage rate is an exhausting and futile endeavor…..When all the perfect boxes are checked off, there is a line of competing buyers that make the experience… well …less perfect.”
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