Periodically I like to share the information I get regarding our local market statistics to help our clients determine if right now is the right time for them to buy or sell Real Estate. I was lucky to get to sit in on a presentation by Michael Orr last week of the Cromford report. Click here for power point presentation
I found it quite insightful due to the fact that he verifies the information in our local MLS data is correct and bases his analysis on those statistics rather than basing his information on National data. He started off his presentation like so many of us do with the disclaimer/definition of a “good” market- because every market can be good, depending on who you are and your goals.
He was clear to say that the Real Estate agents that focus on the distressed market or local homebuilders today may not think it’s a “good” market right now- but if you are a BUYER looking to purchase by September of this year, this is a GREAT market right now…
Basically, it boils down to the simple law of Supply and Demand as the Cromford Index shows currently.
In Chandler for example, the demand being in the RED but the supply in the green shows currently Buyers have the upper hand. However, a truly balanced market would be at 100 for the Market index and we are not far off from it.
Michael predicted that by Spring of 2015, we most likely will see it gradually return to a Sellers market. Nothing crazy, just a slight push upwards, along the lines of inflation which traditionally before the market crashed in 06, 2-5% a year increase in value is all that a homeowner would expect from his home and be quite happy for it.
This time last year, the Market Index was at 151 for Metro Phoenix with a Supply of 63.1 and Demand at 95.3. Things have changed quickly in this past year as it was clearly a Sellers market back then. The prices were also lower too… So a seller today without a huge urgency to sell, very well may be better off today than where they would have fared just 1 year ago as well… seems in life and in real estate, there’s always 2 sides to every coin… If there were a Seller just getting out of the market entirely, we’d most likely recommend to wait until Springtime to sell HOWEVER if they were wanting to purchase, they may fair better selling with today’s prices and incentives that Buyers are receiving rather than waiting to both sell and buy in the Springtime because that way as Buyers, they too can take advantage of the DEALS happening out in our marketplace today.
Michael Orr also spoke to why he thinks that the demand has dropped (please watch the power point presentation, link at top of blog for further stats and details) but mostly because our younger generation (Millenials) are preferring to rent homes today instead of purchasing for many reasons and there’s so many people still renting as a result of losing a home to foreclosure/short sale that the RENTAL MARKET has only gotten more expensive in recent years making it a great time to be a LANDLORD. Because of this (along with the interest rates remaining super low), it’s CHEAPER TO OWN your home than rent today, not to mention the great tax benefits of owning vs renting a home.