Case Shiller Index Explained

/

Several articles came out this week sighting the Case Shiller Index that was released February 27th 2023. Remember the data used in the monthly study is based on a 3 month moving average ending 2 months ago. The data is accurate but more accurate on telling us what was happening 4 and half months ago.

For the latest market insights for your neighborhood just reach out and we will get it to you. Have a great day.

3 Reasons to Buy a Home

/

The recent National Housing Survey by FannieMae found 82% of respondents believe it’s a bad time to purchase a home. In today's market update, I aim to dispel this belief. 

Three reasons why now is actually a good time to buy. If interest rates continue to rise, there is a cost to waiting. And if you buy now, many lenders are offering programs to allow you to refinance with little to no cost when interest rates drop. 

Secondly, given the continued growth of the valley and lack of inventory, we can expect prices to shift up again in the near future. 

Finally, we may be at the bottom of the market, which is always a good time to buy. Demand is higher than supply, which will put upward pressure on prices. Demand is below normal and so are active listings. 

Goldman Sachs Predicts Doom

/

This week let's talk about the Goldman Sachs article that predicts the Phoenix Home Values  will decline 25% in 2023. Here is the link to the article: https://www.abc15.com/news/region-phoenix-metro/phoenix-could-see-2008-like-plummet-in-housing-prices-goldman-sachs-report-says

I feel Goldman Sachs has missed the mark. Here is why. The contract ratio of homes under contract versus those for sale has been increasing the past 4 weeks and we are at our highest level since September. 

Weekly mortgage demand jumps 7% as interest rates drop to lowest level since September. https://www.cnbc.com/2023/01/25/mortgage-demand-jumps-as-interest-rates-drop.html


The count of listings under contract has increased by 22% over the last 2 weeks. showing buyers are quickly coming back into the market. 


Traditionally in Greater Phoenix the number of homes for sale significantly increases in January, this year the homes inventory of homes for sale is decreasing. Home Builder permits are down as well.


The Cromford Market Index (seasonally adjusted) shows 11 of the 17 largest cities in the Valley moved into seller market territory and all 17 cites made positive gains for sellers.

What goes up must come down... maybe

/

Interest rates have dropped just over 1% from their highs. Currently 30 year conventional rates are just over 6% and FHA and Jumbo rates are below 6%.
This market is very rate sensitive. Homes under contract have risen 18% since the beginning of the year. Nationally mortgage applications are up 28%. (CNBC article https://cnb.cx/3XKekxP )
Half of FHA Buyers are seeing seller concessions in the $5,000-$10,000 range. However, if this market continues to improve those concessions may dry up in the future.