Many prosepctive buyers speculate on the state of Phoenix’s rapidly increasing real estate market. We’ve touched on reasons why this “boom” isn’t as worrisome as the circa 2005 boom was. The 2005 boom all boiled down to extremely loose and irresponsible mortgage lending guidlines practiced for several years preceeding the boom. Today, market increases are inventroy driven. Inventiory driven because our primary and secondary financing instrumants are solid and sustainable with stable market interest rates. Such will allow for little trickle down problems to effect real estate pricing. More so, your current value increases are caused by the market having more buyers looking for homes as compared to the numbers of homes available for sale. These numbers are derived from several sources and are tosted around in a complicated statistical standard deviation formula to tell us how many buyers are in the market. Typically, such conclusuions are fairly accurate.
However, we believe a unique market phenomenon is occuring which is skewing the typical market survey results. The phenomeon is that buyers are pickyer than ever. We are not trying to be funny or over sensitive and this isn’t for the reasons you may suspect we are suggesting. We are not going to blame such on any generation , upbringing or stereotype personalities.
Here’s a look at why we believe buyers are ever more finicky than ever:
With the market crash now approaching 10 years since it’s height, many investors are now cashing in on some sweet equity the market has delivered during our market’s recovery in the last few years. It is in the way that these investors are cashing in the is the trick of this tale. Many homes shown by the Talbot Team these days are vacant investor homes that have been completely and beautifully remodeled and placed on the market for sale after a few years of being rentals. I would say 30-40% of the homes we show fit this bill.
Here’s how this ties into inventory. When browsing, on-line or otherwise, prospective buyers see these stunning remodels and know they will settle for nothing less. The result is buyer’s are only buying 30-40% of the homes available in an already low inventory market. The problem is inventory, there just aren’t enough houses for the amount of buyers looking to purchase with even less beautifully remodeled choices.
Herein lies the moral of this post.
Sellers beware…finicky buyers are on the loose.
If there was ever a time when you wondered if you should put those thoughts about repiars, improvements or elbow grease into your home to maximize itrs potential before sale, think no more. To quote a famous sneaker…JUST DO IT!
With supply levels low and demand levels high, appraisers are being forced to push values higher and higher. The nicer the home the easier the sale for more money. The homes that havenot been paid as close attention to, will suffer with longer market times and more price drops.