In the Nerd Talk section of our monthly newsletter, you have likely come to expect an analysis of current market data, stats, and charts. While I still intend to share some data with you, this month is more of a message directly to today’s anxious home sellers. A message to both validate your feelings of exasperation and uncertainty, and to remind you that things will, indeed, get better. A message that, I hope, will show you that we’re all in this together. Buyers, sellers, and Realtors alike, we’re all affected by this market in different ways. Everyone wants to turn the corner sooner rather than later, but until that happens, we just have to take this one day at a time.
On our team, we talk regularly with prospective and current home sellers. It is these very conversations that often lead to the topic of the month that I write about in this newsletter. Lately, much of what we’re hearing is stories from discouraged sellers watching homes in their neighborhood just like theirs sell for considerably less than expected. Sadly, they say this leaves them feeling defeated and hopeless. For many, their current home or area of town no longer suits their family’s needs. The amount of time required to sell in this market only compounds this, and they feel their aggravation grow with each passing day and every new price reduction. Others desperately need to sell for whatever reason, but they unfortunately lack sufficient equity to make that possible, leaving them more unsure of what to do next.
It is entirely understandable for these sellers to feel this way. Realtors are feeling this, too, as it is our job to help make our client’s life better as we move them on to the next stage. There are homes that my team and I currently have listed that are arguably underpriced. Yet, showings remain low, and there are no offers to speak of. We’re in this challenging market with you and deeply empathize with your frustrations. The message I want any seller to hear is that our market is in a state of correction at the moment, and we don’t know how long this will last. If you have your home listed for sale or are thinking of making a move, the best thing you can do is understand this. The projections on how much your home can sell for and how long that might take are moving targets in this dynamic market. What the neighbor’s house sells for may or may not be an indicator of what your home might sell for. Patience, motivation, and realistic expectations are required if you are to be successful in selling your home.
As I’ve written previously, the higher interest rate environment we’ve been in has left many buyers sitting on the sidelines, greatly stifling demand. While mortgage rates have come down slightly in the last month to around 6.5%, listings under contract have risen marginally, but we haven’t yet seen any meaningful effect. If the trend continues, however, and rates dip into the low 6% range, this could potentially be the catalyst for some of the reluctant buyers to get off the fence. As a silver lining of sorts, many of the previously mentioned frustrated sellers have begun to cancel their listings or are letting them expire. This reduction in supply has shifted the balance, causing a soft rebound in the market index from 72 to 78 in the last eight weeks. While this is a positive shift in balance, it should be noted that the supply of active listings has been reduced largely due to withdrawn listings, rather than closed sales.
I never want to leave an article with a negative tone, and this message to sellers should be no different. No market, good or bad, lasts forever. All markets are cyclical, which is why housing should be viewed as a long-term investment. In the depths of the recession of the late 2000s, it felt like the housing market was nearly beyond repair. Fast forward through several challenging years, and not only did we recover, but the median home value today stands at 66% above the highest price reached in 2007. The housing market in Phoenix today was built on solid ground, not a house of cards like the one that caused the Great Recession. With enough time and patience, we will recover from this correction, as well. So, if you’re considering selling your home anytime in the near future and would like to discuss your specific situation, please give me a call. I’d love to talk nerdy with you :)