I’ve never seen anything like it… incredibly low, almost ridiculously low mortgage interest rates, in the high 2’s !! If you’ve been putting off that home purchase, now is probably the time to get off the fence. I could be mistaken, but I can’t imagine you’re going to find better (read LOWER) mortgage interest rates than what’s out there right now.
On the other hand, home prices nationwide are up, as you’ll see detailed in the data cited below. This due in large part to a longstanding lack of available inventory, resulting in bidding wars especially on ‘affordably priced’ homes. First time buyers are up against multiple offers and finding it tough to get contracts accepted. On the up-side, folks who are moving on might discover they have far more equity in their current home than they first thought. However, after quickly selling their own home, they’re having to find a seller willing to accept a contingency. It’s never been more important to seek out a Realtor who is an experienced negotiator. And be sure to ask your agent about their strategy for alternative purchase options. A solid game plan can help you avoid, or at least have a better chance for success in the bidding-wars game.
Regarding home appreciation rates, it seems that the Phoenix area Real Estate market is something of an anomaly. According to those who track this stuff, the Phoenix Valley is the only non-coastal region reporting a solid market appreciation rate for the end of the third quarter.
I’ll be really curious to see what affect the expected Fall market slowdown will have on home prices this year. I suppose there’s really no predicting because… well, you know… 2020.
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Home prices across the United States continued to climb in September, rising 7.8 percent in the 12 months since October 2019, according to Radian Home Price Index (HPI) data released today by Red Bell Real Estate, LLC, a Radian Group Inc. company. The Radian HPI is the most comprehensive and timely measure of U.S. housing market prices and conditions.
Since the start of the year, the Radian HPI has risen at an annualized rate of 7.4 percent, which was higher than the increase of 6.4 percent recorded during the first nine months of 2019. During the third quarter (July – September 2020) national home prices increased at an annualized 8.9 percent, which outpaced the 6.8 percent annualized gains during the second quarter (April – June 2020), where home prices gains were more subdued. The Radian HPI is calculated based on the estimated values of more than 70 million unique addresses each month, covering all single-family property types and geographies.
“After slower home price growth in the second quarter, the third quarter of 2020 showed a clear return to the faster price appreciation reported at the end of 2019,” noted Steve Gaenzler, SVP of Data and Analytics. Gaenzler added that “until there are clear signs of a change in the substantial imbalance in supply and demand, all signs would point to a continuation of gains for home prices. However, it is not unlikely that as prices continue to rise, affordability concerns may begin to cool appreciation rates in some markets.”
National Data and Trends
Nationally, the median estimated price for single-family and condominium homes rose to $262,505.
Properties listed for sale typically experience large increases during the spring and summer buying season compared to winter volumes. In fact, since 2008, the seasonal high in count of active listings has been, on average, more than 20 percent higher in spring and summer than the prior winter lows. These increases in supply are needed to meet the demand from buyers active in the same periods. More recently, in each of the last five years, the peak has been at least 25 percent higher. However, in 2020, the pandemic significantly subdued listing activity, creating a strong imbalance in supply and demand. The count of active listings as of July 2020 was only 8 percent higher than that of December 2019, lower than any period even during the Great Recession. This alone represents a decrease of nearly 165,000 listings nationwide that would normally have been available to active buyers.
Nationally, demand for property purchases also remained at all-time highs. Counts of residential home sales were significantly higher than in any third quarter. In total, the number of closed home sales was 39 percent higher than the average third quarter going back to 2007. The combination of the dearth of listings with all-time record sales volume has put upward pressure on home prices nationally.
Regional Data and Trends
In September, all six Radian HPI Regional indices recorded positive annual home price appreciation rates. Home price appreciation accelerated in all regions compared to the month prior with the Northeast and South Regions both appreciating at their strongest monthly rate of 2020.
While all regions showed positive price appreciation this month, regional and state differences do impact how quickly properties are selling. The average length of time properties that sold in the month of September were listed prior to their sale tied an all-time low of 89 days on market (DOM). Of the ten states with the largest number of sales in September: Texas, Florida, Ohio and Washington all recorded below median DOMs at 88, 75, 70 and 71 days, respectively. The states with the longest time on market before selling in September included the Northeast states of Vermont and Maine (205 and 150 DOM, respectively) and the Mid-Atlantic states of New York, Connecticut and New Jersey (134, 130 and 118 days, respectively).
Metro Area Data and Trends
In September, half of the top 20 metropolitan areas (CBSAs) reported faster appreciation rates than the prior month. However, compared to the second quarter, the third quarter recorded faster appreciation rates in 19 of the 20 largest metros. Other than Phoenix, all of the metros that recorded faster appreciation rates in September compared to August were located within 50 miles of an ocean or the Chesapeake Bay, with most being in the South or West regions. All the top-20 largest metropolitan areas in Texas and the Midwest slowed their appreciation rates in September.
Source: Radian . Reprinted with permission from RISMedia. ©2020. All rights reserved.
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Bill Salvatore / Arizona Elite Properties
Your Valley Property Team
Residential Sales, Marketing, and Property Management
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