The past few months have been a bit of a social and economic rollercoaster—and created the need for a more strategic approach to buying and selling homes. The R.O.I. Properties team has launched our new blog series, The Strategic Seller: Excelling in the Residential Market, as a way to help both home sellers and homebuyers to navigate the process for maximum success. To ensure that you are alerted when new articles come out, make sure to like R.O.I. Properties on Facebook.
Mortgage rates just dipped to historical lows, with rates down to 2.88% for the first time in 50 years. While those rates may get buyers salivating about purchasing a home with rock-bottom payments, the dreams of turning the key on a new front door need to be balanced against reality: The Phoenix market is currently experiencing very low inventory and significant pent-up demand.
Due to the stay-home orders and other pandemic safety measures, April and May saw many potential sellers remaining on the sidelines. Even though that pushed some listings later than customary seasonality, June did not fare much better, with inventories running 12% lower than last year—and the homes released by owners bailing out of the vacation rental market were quickly absorbed. As of June 20, there were fewer than 9,000 listings for sale through the Arizona Regional MLS and less than half of those listings were single-family homes under $500K. Although the number of single-family permits filed is up this year, it has not been nearly enough to meet increased demand.
Our expectation at R.O.I. Properties is that the residential real estate situation will change by 1Q 2021. However, with the foreclosure moratorium extended for homeowners with FHA, Fannie Mae, Freddie Mac, VA and USDA loans and forbearance options available until December 31, 2020, uncertainty will continue to reign for the time being.
Buying a Home in Phoenix? Build Your Strategic Plan First
Add it all up, and sellers have the upper hand at the moment. Markets such as this can be difficult from a buyer’s perspective, but there are still opportunities for those who are willing to be strategic and focused. A strategic plan for buyers right now centers on knowing very specifically what you want, even more so than usual.
Gone are the good old days of a leisurely Saturday drive through various neighborhoods, touring several homes in each, and taking your time on making an offer. Under current conditions, one worthy strategy is to secure an off-market deal—but we are not talking about the random spam text messages or mass mailings you may have received. The process starts by picking your target neighborhood first, ideally a specific subdivision. (If you are moving in from out of town, an experienced Realtor can be your eyes on the ground, based on your preferences.) At that point, your professional agent can go into the community and make personal contact with property owners to know of your interest—as well as your seriousness about buying and qualifications on the financial side.
In a tight market, restricting your search to the available inventory is likely to lead to frustration. To enlist the help of professionals who can help you formulate a strategic plan to find and purchase your dream home in your desired neighborhood, contact R.O.I. Properties at [email protected] or 602-319-1326.