Sellers can rejoice: Valley housing market stays strong SanTan Sun News

Sellers can rejoice: Valley housing market stays strong

Sellers can rejoice: Valley housing market stays strong
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BY PAUL MARYNIAK
Executive Editor

Any gloom that prospective home sellers might have been experiencing late last year should be gone by now, judging by the latest word from one of the region’s major housing market analysts.

The Cromford report said the Valley-wide market is perking up with surprising strength — and turning 2019 into a big year for home sellers.

Citing a “massive number of homes closed” in April that exceeded April 2018 by nearly 500 homes — a 5.3 percent increase — the Cromford Report stated: “This is a significant sign that the recovery in demand is growing in strength and the first time we have seen year-over-year sales growth since August 2018.

“As a result, the annual sales rate rose between March and April 2019. Another significant signal of market health,” it added.

Realtor.com’s latest housing market report last week somewhat supported that observation on a national scale, noting that “Despite a real estate slowdown gripping the nation, this year’s housing market is expected to be busier than Realtor.com economists originally predicted late last year. That means more home sales — and higher prices — are on the way.”

The website said lower mortgage rates were making homes more affordable for buyers — even though home prices are still predicted to rise.

“The economic team expected rates to climb to 5.5 percent in 2019, but instead they have hovered around 4 percent.” Realtor.com said. “Economists say rates are now likely to rise a little to 4.5 percent, still well below what buyers were dreading.”

But the Phoenix market apparently is outperforming the national trend — likely the result of a steady influx of new residents that has made Maricopa County the fasted growing county in the country.

Even with that population increase, the Cromford Report said, “Nobody would have predicted this strong a recovery back in January.”

“Last month we saw strong growth in listings under contract,” it said. “This month we see strong growth in closed listings. This is why listings under contract is such an important number — it gives us early warnings of a change in the market. On this occasion, the change is strongly positive for sellers.“

The Cromford Report and Realtor.com agree on the major driving factor what each sees on a national and local level. — namely, lower-than-expected interest rates.

“New listings have been flowing a little more freely since March – we know sellers get encouraged by lower interest rates as well as buyers,” the Cromford Report said.

But slowpokes may be in for a disappointment, it cautioned, noting, “the new higher level of demand is making short work of the extra supply” of homes.

“Buyers waiting because they thought prices would fall have been left in the dust,” it added. “The market continues to strengthen and the likelihood of falling prices in the near term is minimal. We have extremely low levels of distress, chronic low supply and the best buyers can hope for is that the appreciation rate will trend lower. We think that is a reasonable expectation, but it shows no sign of turning negative.”

“All in all, the market is more vibrant now than almost anyone expected it to be,” the Cromford Report said. “This is good news for sellers, agents, title companies, lenders and developers. If interest rates start to rise again, then we may see another mild slowdown, like we experience from September 2018 to February 2019, but at the moment the market engine is firing on all cylinders once more.”

The assessment stands in sharp contrast to what’s going on nationally, judging by Realtor.com’s latest report.

“It’s still going to be a lukewarm year for the housing market,” said Danielle Hale, the website’s chief economist. “We’re going to see higher prices and slightly higher home sales than we expected. But home sales are still going to decline slightly as a result of the housing slowdown. There’s a gap between what sellers are looking for and (what) buyers are hoping to pay.”

But even amid its gloomy assessment, Realtor.com sees no basic tilt in the market that favors buyers when it comes to price.

“The downside for buyers — and upside for sellers — is that prices are expected to rise more than Hale’s team originally forecast,” it said. “That’s because the swelling ranks of buyers motivated by those lower mortgage rates will increase demand — and therefore prices.

Meanwhile, Realtor.com’s economists predict the number of home sales will almost hold steady, dipping just three tenths of one percent. Originally, they predicted sales would fall by 2 percent.

“The market has slowed down from previous years because sellers, seeing an end to the good days of high prices, rushed to put their homes on the market,” the website said. “But this happened at the same time that many buyers backed off because of those same high prices. The glut in supply led to lower price growth and fewer home sales.”

Hale also noted that local markets could be acting distinctly differently from the composite national picture.

“In some markets there’s still not enough housing available, so buyers are likely to find a competitive market,” she said. “But in some markets prices are so high that buyers are choosing to be patient and sit on the sidelines.”

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