Here are some facts about today’s real estate market:
We are and have been in a seller’s market since 2014. There are currently 4,231 active homes for sale in the entire Arizona Regional MLS system. There are 749 homes that are listed as “coming soon” which are not technically Active in the MLS. 9,764 homes are under contract. 6,984 homes were listed in the past 30 days.
The average list price for single family detached (SFD) homes in the valley is $697,446.
Of all of the SFD homes that have sold, the average sale price is $626,214 and as an average, homes are closing at 102% of asking price.
If we reduce our sampling of sold properties to only the sweet spot, which is 3 Bedroom/2 Bath, then we have a total of 2,146 sold SFD homes in the past 30 days with an average sale price of $466,060 at an average 103% of asking price.
On average, we are seeing only 24 days from the time these homes hit the market to the time they close escrow. A typical conventional sale takes approximately 30 days, although some lenders can close faster than that. When a home closes quickly, it’s usually due to terms that are favorable to the seller. Some of these favorable conditions include buyers who are investors with cash who can close quickly with no contingencies, appraisals, repairs, etc. Some of these buyers are not just small investors, but large firms who are snatching up properties as investments.
When buyers are buying solely as a financial investment, you can rest assured that they’re not terribly concerned about the emotional investment, which makes it very difficult for the average home buyer who actually needs a home to find a home, because that investor can financially outperform the average buyer and offer much more favorable terms to the sellers.
Even if the price seems too high on a property, as is the case in these times, there’s going to be someone who is willing to pay more than you even if it means they might take a loss on the property. It doesn’t make much sense, but it happens, and as long as the supply is short and demand is high, upward pressure will continue.
Offers that are less than asking price based upon the current conditions and historical data, regardless of one’s opinion of price, will likely be rejected.