Lorraine Ryall
As summer begins to fade and we head into the fall, we become the envy of those bracing for the winter storms.
Let’s face it, this is the reason we all love to live in Arizona—for the fall, winter and spring months. With the cooler temperatures comes our annual flock of snowbirds, ready to relax and stay warm while enjoying our perfect winter weather.
CANADIANS—ARE THEY BUYING OR SELLING THIS YEAR?
Canadians always have been at the top of the list for buying second homes in Arizona, but last year, with their weak exchange rate, we saw a big decline in the Canadian market. Instead of being buyers, we saw more Canadians become sellers, selling their homes to take advantage of the gains they made in investing in our housing market and the weak Canadian loonie. The exchange rate dropped as low as 68 cents this past January, but was back up to 77 cents this past September, close to September 2015, which was 75 cents.
However, this year may see some of our Canadian friends buying again. Home prices are rising faster in Canada than they are in the U.S., and the National Association of Realtors (NAR) says more Canadian buyers will snap up stateside vacation properties as a result.
The American real estate trade group’s prediction is based on the idea current Canadian homeowners will free up some of their increased equity gained from appreciating property values and put it toward a second home south of the border.
“That’s a little bit contrary to what we might have expected earlier because the strong U.S. dollar was making U.S. prices seem more expensive,” said Danielle Hale, NAR’s managing director of housing research.
REGULAR MARKET AND SECOND-HOME BUYERS
Supply and demand is the key factor to determine if we are in a buyer’s or seller’s market, and, as we have been all year, we still are very much in a seller’s market, with substantially more demand than supply. We also are seeing more second-home buyers from within the U.S. who are filling the void left by the Canadian buyers, which is helping keep the demand high as we head into our second-home buyer season.
| PHOENIX METRO AREA SUPPLY AND DEMAND | Sep. 2015 | Sep. 2016 | Change |
| Supply | 81.5 | 70.5 | -13.5% |
| Demand | 101 | 105.58 | 4.5% |
| Demand vs Supply | 23.9% | 49.8% | 25.8% |
| MESA LISTINGS AND SALES | Aug. 2015 | Aug. 2016 | Change |
| Sales | 650 | 739 | 13.7% |
| Under Contract | 940 | 1012 | 7.7% |
| Active Listings | 1547 | 1466 | -5.2% |
| Median Sales Price | $215,000 | $236,450 |
As you can see from the statistics, which are taken from the Cromford Report, our home sales and under-contract homes for August are significantly higher than this time last year. Demand has increased while supply has decreased, causing 50 percent more demand than supply. Nothing creates a hot market more than supply versus demand. When the spread between them is this high, we are in a strong seller’s market and can expect prices to continue to increase.
The median sales price for Mesa has increased by 10 percent from August 2015. Even with below average Canadian buyers in the second-home market this year, we certainly are making up for it with more U.S. second-home buyers, regular sales and supply versus demand.
FOR THE SELLER
If you are thinking of selling, now is a great time to list your home, while the supply is low and there are fewer homes with which to compete. With interest rates at record lows, more buyers are pulling the trigger and buying homes to take advantage of such low rates.
FOR THE BUYER
Mortgage rates still are at record lows, making it a great time to lock in a 15- or 30-year fixed rate. If the spread between supply and demand remains where it is today, buying in the spring could be a lot harder and more expensive than buying now.
Without that crystal ball, we never can know for sure what is going to happen, especially in the housing market. So, all we can do is look at where we are today, how we compare to last year and what we can safely predict going forward.
We know interest rates are likely to increase. They certainly aren’t going to be going down any significant amount. There currently is a lot more demand than there is supply, and nothing on the horizon shows this will be changing any time soon.
SELLER – If you are considering selling your home, you can get a free home estimate at InstantHomeValueAZ.com, or contact me directly for a free no obligation market analysis.
BUYERS – If you are considering purchasing a home, you can search the MLS like an agent on my website at Homes2SellAZ.com, or contact me directly, so I can set you up on a search, and we can start viewing homes matching your criteria.
Lorraine Ryall has been a Multi-Million Dollar producer for the past seven years. You can reach Lorraine at (602) 571-6799. You also can send her an email at Lorraine@Homes2SellAZ.com, or visit her website at Homes2SellAZ.com.