{"id":462,"date":"2014-04-03T03:43:24","date_gmt":"2014-04-02T22:43:24","guid":{"rendered":"https:\/\/nohasslelistingblog.com\/?p=462"},"modified":"2014-04-03T03:45:29","modified_gmt":"2014-04-02T22:45:29","slug":"buyers-play-hide-and-seek","status":"publish","type":"post","link":"https:\/\/nohasslelistingblog.com\/?p=462","title":{"rendered":"Buyers Play Hide and Seek"},"content":{"rendered":"

The shift from the strong seller market we saw in the first half of 2013 to a buyer\u00e2\u20ac\u2122s market in 2014, has created a certain level \"\"<\/a>of disbelief.\u00c2\u00a0 Local markets shift fairly rapidly \u00e2\u20ac\u201c and changes in supply and demand are generally the cause.\u00c2\u00a0 Although we have commented on this shift in past articles, it is worth looking at again because shifts don\u00e2\u20ac\u2122t always become trends.\u00c2\u00a0 In this case, it is looking like a trend.\u00c2\u00a0 Although supply is<\/span> building, that is not the driving force behind the shift.\u00c2\u00a0 The puzzle in today\u00e2\u20ac\u2122s market seems to be \u00e2\u20ac\u0153where did the buyers go?\u00e2\u20ac\u009d\u00c2\u00a0 <\/span><\/p>\n

To quote our favorite real estate guru Michael Orr of the Cromford Report \u00e2\u20ac\u0153\u00e2\u20ac\u00a6the number of active listings continues to grow. Although the total number\u00e2\u20ac\u00a6is quite normal at 30,314, we would usually be seeing declining numbers by now because March through May is the peak season for active listings going under contract. If the number of active listings manages to grow even slightly during March then it is likely to soar during the second half of the year, unless there is a major change in market direction. \u00e2\u20ac\u00a6 the total today\u00e2\u20ac\u00a6is the highest we have seen since April 2011 and 60% higher than March 15, 2013.<\/span><\/p>\n

New listings continue to arrive much faster than last year, but not in excessive numbers. We have seen 26,353 year to date, 11% more than the 23,813 we counted last year. This would normally not be considered excessive, but the shortage of buyers means there are more new listings than the market needs.\u00e2\u20ac\u009d <\/span><\/p>\n

So again, the real problem is the drop in buyers.\u00c2\u00a0 Sadly, we haven\u00e2\u20ac\u2122t heard much \u00e2\u20ac\u0153expert explanation\u00e2\u20ac\u009d for this but we have a few theories:<\/span><\/p>\n

    \n
  1. \u00c2\u00a0The major investors that have been heavily buying (because they are well funded hedge funds \u00e2\u20ac\u201c such as Blackstone Group and Colony) have largely ceased purchasing in the valley.\u00c2\u00a0 We believe this composes the largest percentage of the \u00e2\u20ac\u0153missing buyers\u00e2\u20ac\u009d.\u00c2\u00a0 While this drop does impact our market, we do not consider this purely a bad thing.\u00c2\u00a0 Hedge funds purchased to hold and rent for 3-7 years and are not end users.\u00c2\u00a0 While this helped push up values in the valley, it did take away properties to end user buyers who could not compete with these cash offers.<\/li>\n
  2. The basic economic picture has still not fully recovered.\u00c2\u00a0 To obtain loans to purchase properties (as the average buyer must) one must have employment.\u00c2\u00a0 Although the employment rate is better than it was at the depth of the Great Recession, it is far from \u00e2\u20ac\u0153normal\u00e2\u20ac\u009d or \u00e2\u20ac\u0153optimum\u00e2\u20ac\u009d.\u00c2\u00a0 No housing market fully escapes the basic economics forever.\u00c2\u00a0 So although we consider the housing market \u00e2\u20ac\u0153recovered\u00e2\u20ac\u009d, we do not consider the job market recovered.<\/li>\n
  3. The Millennials who largely compose the pool of first time homebuyers are not buying in normal volumes.\u00c2\u00a0 Some of this is being subscribed to changes in their belief systems as to the value of home ownership \u00e2\u20ac\u201c having seen housing equate foreclosure in the distress market.\u00c2\u00a0 Personally we believe it has less to do with psychology and more to do with mounds of student loan debt and the lack of financial ability to purchase.<\/li>\n
  4. Lending practices have not returned to the standards of previous years.\u00c2\u00a0 Locally, FHA loan limits have been lowered down to 271K from the previous 350K range.\u00c2\u00a0 Additionally, self employed borrowers even with perfect credit and sizable down payments are struggling to obtain loans. Too many viable buyers are being denied loans.<\/li>\n
  5. Prices have risen over the last two years.\u00c2\u00a0 Just as rapidly falling prices cause sellers to withdraw from the housing market, rising prices can cause buyers to withdraw as they find renting more attractive.\u00c2\u00a0 This seems to be proven by the rental rates in the valley which have been in an upswing since January of this year.\u00c2\u00a0 As rents continue to rise due to increased demand (after all if you are not buying, you are renting) purchasing will again become more attractive.\u00c2\u00a0 When you can purchase and have a payment equal to or below what you can rent a comparable property for \u00e2\u20ac\u201c most renters become buyers.\u00c2\u00a0 If rental rates continue their rise \u00e2\u20ac\u201c look for the pendulum to swing again to purchasing.<\/li>\n
  6. We suspect net migration in to Arizona has faltered recently (see point 2 \u00e2\u20ac\u201c jobs and weather seem to drive migration) although the census numbers seem a bit unreliable.<\/li>\n<\/ol>\n

    Does the drop in buyers mean that homesellers should despair?\u00c2\u00a0 Absolutely not!\u00c2\u00a0 But it does<\/span> mean that the dynamics that drive a home sale are more important than ever \u00e2\u20ac\u201c marketing, pricing, condition, location, accessibility\u00c2\u00a0 and of course your choice of agent.\u00c2\u00a0 You knew we were going to say that, didn\u00e2\u20ac\u2122t you?\u00c2\u00a0 <\/span><\/p>\n

    As always, we will continue to monitor our market as it shifts.\u00c2\u00a0 If you are curious as to your home\u00e2\u20ac\u2122s shifting value, feel free to contact us. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

    The shift from the strong seller market we saw in the first half of 2013 to a buyer\u00e2\u20ac\u2122s market in 2014, has created a certain level of disbelief.\u00c2\u00a0 Local markets shift fairly rapidly \u00e2\u20ac\u201c and changes in supply and demand are generally the cause.\u00c2\u00a0 Although we have commented on this shift in past articles, it […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-462","post","type-post","status-publish","format-standard","hentry","category-home-values"],"_links":{"self":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/462","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=462"}],"version-history":[{"count":3,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/462\/revisions"}],"predecessor-version":[{"id":464,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/462\/revisions\/464"}],"wp:attachment":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=462"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=462"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=462"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}