Real Estate Market Update for Laveen and Phoenix: February 2020
There are currently 15,698 listings on Feb 26, 2020 while there were 23,445 listings at the same time in 2019. Fewer listings is a sign that it is still a strong sellers market thus far in 2020. In Laveen Arizona, there is an even bigger shortage of homes for sale and builders are trying to keep up with the growing demand as there is a labor shortage of construction workers.
Currently, the average days on the market in Phoenix for a home is 64 days compared to 72 days this time last year. Days on the market for Laveen homes are even less at around 30-40 days. As long as your house in Laveen is priced correctly with professional photos and no major repairs are required, an educated Realtor should be able to sell your property within 14 days. Most homes are getting multiple offers within a few weeks which means most buyers are left stranded. Buyers who expect to purchase high demand properties at a discount in this current market are wasting their time submitting an offer. One of the few ways you can purchase a high demand property at a discount in today’s market is by offering cash. Another way to purchase properties at a discount is by purchasing “Fixer upper” properties that need work.
The current sale to list ratio is 98% which means for a property that is listed at $100,000, the accepted sale price is about $98,000 or for a property that is listed at $200,000, the sold price is on average $196,000. These numbers are even higher in Laveen. To reiterate my previous point, submitting purchase contracts well below market value in today’s market is a waste of your time. Most sellers are receiving multiple offers within a few weeks and buyers are desperately competing with other buyers.
The most important statistic is month’s supply. The current month’s supply is 2.2 months which means if there were no other listings added for sale, it would only take 2.2 months to sell all of the homes on the market. The balance between a buyer and seller’s market is around 6 months of supply. The fact that it is well below 6 months suggests that 2020 is still a strong seller’s market in Phoenix and Laveen.
The current mortgage interest rates have dropped even further and are now around 3.3%. If you were thinking about cash out refinancing in order to invest the capital, now is the time. If you have no idea how to use your equity for higher returning investments, then do not tap into your equity. Refinancing without cashing out may still be a good idea if you can significantly drop your interest rate. One of the reasons so many buyers exist in this market is due to low interest rates. If interest rates ease back up towards 5 and 6%, values of homes may decrease a little as fewer buyers could afford to buy at higher interest rates. However, I expect more and more zombies from California to migrate to Arizona within the next 10 years with Laveen, nicer parts of Phoenix and the suburbs being in high demand. In fact, I expect a massive surge in population in Phoenix not only from California but also from other unaffordable housing cities such as New York City. With a massive projected future demand for housing in Phoenix, it will not matter as much if interest rates rise. In my opinion, potential investors waiting for another huge real estate crash in Phoenix will be disappointed. I do not see anything close to the deals that were there between 2009-2015 unless real estate developers build at a rapid pace towards the 6 month supply of inventory which would decrease demand and create opportunities to purchase investment properties but nothing close to the previous deals of the last decade. However, purchasing investment properties even at a lesser cash on cash return than in the previous decade is still a great wealth building tool if you understand what you are analyzing and leave room for errors by purchasing value add properties, also known as “fixer uppers.”
With the new freeway, new commercial properties and new residential homes, Laveen’s real estate market will continue to see a growing demand from out of state migrants as well as in state residents who are seeking to live in newer and more affordable developments compared to other parts of Phoenix where old residential and commercial properties exist. There are a number of new developments being built in Laveen but it is taking longer than expected due to a labor shortage.
If there is anything in the world you need help with or are looking to buy or sell in the future, save my number as “Realtor Lasker” at 480-779-8579 and my email at [email protected] Good luck. ????