We expected this year to be a strong market, but it’s definitely heating up to be a much stronger seller’s market than anticipated, with home prices continuing to increase month over month.
If you have been thinking about selling your home but are not sure as to the best time to do so, it doesn’t get much better than this.
So, what’s driving the market?
Supply and Demand
This is pretty much the dictator of where the market is today and where it is headed in the near future. As of March, demand far out-weighed supply. The Cromford Market Index (see chart) is a single value that indicates the balance of the residential resale market. Values below 100 indicate a market that favors buyers. Values above 100 indicate a market that favors sellers. A value of 100 is equally balanced. The current market index is at 158.9, which is a strong seller’s market. We will start to see more supply coming on the market as we head into our peak selling season, which is now through July. Even with the increase in supply, demand will be even higher, continuing our unbalanced market trend.
Multiple Offers
With such low supply, we are seeing multiple offers again, especially in homes priced under the $350,000 price point. I called on a listing that had been on the market for only two days, and they already had 12 offers and were over asking price. Multiple offers drive the already high prices even higher as buyers bid over the asking price to get their offer accepted. The luxury market also has picked up steam in the past 12 months, with 42 percent more properties closing over $1 million as compared to 2016.
Interest Rates
The Federal Reserve voted in March to raise its benchmark interest rate to the highest level in a decade. As the Federal Reserve continues raising the federal funds rate, mortgage rates are expected to rise as well. With increasing mortgage rates and increasing home prices, affordability is a more pressing issue for buyers. We will see an increase in demand over the next few months as buyers try to beat the rising costs of home ownership.
Market Statistics
Active listings in Mesa for January and February have decreased by 10.8 percent over 2016, and sales have increased by 22.8 percent. The median sales price for Mesa has increased 8.9 percent year over year.
With the current trend continuing, March sales and median sales price will continue to increase and keep driving the market up.
If you have been thinking about selling your home, now would be a perfect time to get it listed while we are in such a strong seller’s market. If you would like to find out the true market value of your home and the top price for which you could sell your home in today’s seller’s market, please email or call me directly to set up a free in-home valuation.
Lorraine Ryall is ranked in the Top 1 Percent of Realtors in Maricopa County and has been a Multi-Million Dollar producer for the past nine 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.