Mesa, Tempe & Scottsdale, AZ Real Estate Market
The Mesa, Tempe, and Scottsdale real estate market has been slowing over the past few months. Historically, resale housing activity has been pretty good during this time of year. However, sales this year have been slightly lower than they have in previous years. This demonstrates that the resale market is growing weaker. In fact, this year is the weakest that the Mesa, Tempe, and Scottsdale real estate market has experienced in six years.
Experts did not expect that the level of activity in the Mesa, Tempe, and Scottsdale real estate market would match that of previous years. They did not predict, however, that the market would decline as much as it has.
Last year, there was a rapid increase in the average home price in the Mesa, Tempe, and Scottsdale real estate market. Even though the home price has flattened this year the market continues to suffer from the dramatic increase in price.
The Mesa, Tempe, and Scottsdale real estate market has seen a decrease in the number of first-time buyers. Additionally, there has been an increase in the move-up markets – people purchasing larger houses than those they currently own. These conditions combined contribute to the slowing housing market. Stable or increasing median prices are likely to be seen during this period of time. A vast majority of homes purchase in the Mesa, Tempe, and Scottsdale area fall between the $200,000 to $299,999 range.
Increasing mortgage rates also contribute to the weakening market conditions. This makes houses less affordable than they have been in the past. Rates are up by 1.0% causing the mortgage rates on a median priced home to increase from $1,180 to $1,405.
Investors and home sellers are seeing that buyers are reluctant to purchase homes because of the rapid price growth in the area along with the increase in mortgage rates. Another factor that contributes to this reluctance is the uncertainty about future appreciation of homes. If homes do not appreciate, yet prices continue to rise, homeowning becomes undesirable. It becomes increasingly difficult for homeowners to maintain their homes under these conditions. Home sellers find that homes remain on the market for a longer period of time, sometimes without offers.
Current investors in Mesa, Tempe, and Scottsdale real estate should sell properties as quickly as possible to cut their losses. It may be possible to make a small amount of profit from the sale, but the priority at this point should not be making a profit. Instead, it should be to sell the property quickly without incurring any additional costs. Waiting around for market conditions to improve will only cost more in the long run as buyers take control of the market.
Home sellers should price their homes competitively but not so high as to turn away potential buyers. To make sure that Mesa, Tempe, and Scottsdale real estate is priced properly, sellers should pay close attention to similar homes that have recently sold in the area.
Prospective investors should stay away from Mesa, Tempe, and Scottsdale real estate. There are no financial gains to be seen in the foreseeable future.
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