The following is a special market alert from our Designated Broker / Owner, Joseph Maggiore.
Inflation and interest rates and gas prices, oh my!
Even if you live deep in the woods or don’t have a TV, these issues have been inescapable lately. It’s in the news, online, and you can’t get through a conversation without it coming up. But what does it all mean for you? It means that the market is changing, which also means you should be paying attention for Phoenix real estate market opportunities.
While I am NOT an economist (and I’ll sit out the gas prices and inflation debates), I DO have thoughts on what’s happening with the Phoenix Real Estate market today and what these ever-increasing rates will mean for the market in the coming months. It’s obviously way too much for one short article, so I took the liberty of boiling down a few points that I feel pretty strongly about:
The Phoenix Real Estate Market: Investors have a solid opportunity right NOW!
Investors usually come in with all cash or at least higher down payments than many other Buyers. That can mitigate just how much pain these rates make them feel. Add in the fact that rental rates are still at record highs, even as the resale market slows and the profit gap grows even more. And round it out with rental rates projected to remain high for the foreseeable future, and you have an opportunity!
The Phoenix Real Estate Market: That cash I mentioned, it’s having a moment… again!
This one’s a no-brainer but bears repeating. At different times in different markets, the all-cash Buyer has waned and waxed in its appeal. There’s no escaping that if you’ve got cash right now, you will deal with significantly less competition than you would have just three months ago, making a cash buyer increasingly attractive.
The Phoenix Real Estate Market: There ARE still opportunities out there for financed Buyers!
The bottom line here is that rates are higher, which will certainly (and unfortunately) pull many Buyers out of the pool. Still, if you’ve got the budget to work with higher rates, the landscape has significantly changed for you. The tradeoff between paying higher interest rates and NOT having to offer 10%+ over asking, while not equal, is real. I’ll stop short of saying that you can “Buy now and refinance later” (we learned that lesson already, right?). But, if you’ve got the means to put down a reasonable down payment and hang in there for a while, there will inevitably be a favorable rate down the line.
Of course, this is the “60-second” version of these thoughts, so if you have questions about the Phoenix real estate market or your situation, you know what to do – call us anytime at 480-270-5355 to talk with one of our dedicated, experienced Realtors.
In the meantime, if you’re wondering how much your home would be worth in this changing market, to learn more about how we determine listing prices.