VARIOUS MORTGAGE RATE PREDICTIONS – No Guarantees

Sources: HSH.com, ATTOM, NAR, First American, realtor.com, Home Qualified

  • Rates will drop or moderate!
  • Volatility for 30-year fixed in 2023; likely between 5.875% and 6.875%
  • Could drop below 6% by end of Q2 2023
  • Expect higher rates until inflation makes strides back toward 2% target

FHA PURCHASES –24% of total; up from 20% in April

*Attractive option, especially with loan limit increase, mortgage insurance decrease, and lower rates

MONTHLY AVERAGE PRICE –$284.96/SF

MEDIAN SALES PRICE –$435,000

  • up from $429,000 last month
  • down 9.4% YOY
  • February to May 2023 – up 4.8%

LONG-TERM APPRECIATION –$284.96/SF; Down 6.9% YOY

*Strongest appreciation since December – under $300K and Luxury

CLOSED SALES –3.4% decrease (NAR)

CROMFORD MARKET INDEX

Supply – 52.5; Demand – 84.7 (affected by 7% interest rates); Market Index – 161.3

  • Seller Market good for both buyers and sellers
  • Similar to 2019 trend
  • AZ is home to two of the fastest-growing cities in the country
  • Seller Markets – fifteen municipalities; Balanced Markets – Maricopa and Buckeye

CONTRACT RATIO (UNDER CONTRACT/#ACTIVE X 100) – 83.4

TOTAL LISTINGS U/C – down approx 1000 units YOY

NEW LISTINGS –6148 + 494 Coming Soon = 6642 total

  • down 404 YOY
  • Lowest new listing count in over 23 years!

SUPPLY –10,982 (average decline -229 per week)

  • October 2022-May 2023 – down 44%
  • May 2022-May 2023 – up 35%

PRICE REDUCTIONS –1247; 11.4% of active listings; median reduction – $10,000

*Price reductions are NOT rising due to lack of inventory

MEDIAN DAYS ON MARKET – 21; down from 56 in January

CONCESSIONS – 2711/40% of total closings; $8550 median

SINGLE-FAMILY PERMITS – 6550; down 49%

NEW HOME SALES – 246; down 26%

FLIP SALES – 477; down 69%

*Slight softening – investors needed to unload and focus on waiting; short-terms scale back

iBUYER PURCHASES – 141; down significantly from 917 YOY

LONG-TERM RENTALS

  • Median List $2200; Closed $2175
  • 12-Month Rental Supply – 3746

VACATION RENTALS

  • Scottsdale ranks second in U.S. for most Airbnb rentals and expensive rates
  • Short-term operators may go long-term or sell
  • Occupancy – Scottsdale and Phoenix 65%; Paradise Valley 62%

YOY MARKET CONDITIONS

  • Median Sales Price – 435,000 (-$45K)
  • Sales Over Asking Price – 19% (-36%)
  • Seller Concessions to Buyer – 40% (+27%)
  • Median Concessions to Buyers – $8550 (+$5050)
  • SP/LP Ratio – 97.7% (2.3% below asking)
  • Median Days on Market – 21 (+14 days)

SUMMARY

  • Declining Supply
    • Insufficient number of new listings to offset accepted contracts and cancelled/expired listings
    • Lowest level of new listings in over 23 years!
  • Growing Seller Market – prices rising, but not so fast
    • Tracking 2019 (not 2021/22)
    • Casa Grande is the last city remaining in Buyer Market
    • Buckeye and Maricopa are the last two Balanced Markets (and quickly heading to Seller)
    • All other cities are in Seller Markets
  • FHA contracts getting popular – DPA programs coming out
  • Long-term rentals rising in cities with a higher saturation of short-term rentals
  • Luxury contracts over $1M are having the second best year ever; still strong in peak season
  • Leading metrics in Greater Phoenix do not support continued downward pressure on price for most cities

Please feel free to reach out with any questions.  We have more detailed notes if you would like them. At Bison Ventures, we understand that the current market is challenging and there is uncertainty regarding interest rates. We know we have many clients in need of a new home, and we do not want today’s interest rates to be a barrier. We are currently offering the Bison Refinance Program – After six on-time payments of your new mortgage, you are eligible for a Special Refinance for a period of 3 years from your closing date. This entails NO lender or appraisal fees.  Please let us know if any of your clients would be interested in discussing this further. It’s a perfect opportunity to buy now, and lower rate later.