Is it a Good Time to Sell Your Home?
Arizona’s housing market is AMAZING right now! If you’ve been considering selling your house, there is a narrow window of time before the FED increases interest rates again where you can get into the home you need.
We’ve been getting a lot of questions recently about how the market is doing and what the projections are, here in Arizona for the long and short term future. One friend in particular who bought a starter house in early 2021 is needing to upgrade to a larger home but isn’t sure if now is a good time? Does that story sound familiar to you?
Current Property Value
Well here’s what we found when we looked at the value of his home over the last year…
The value has gone up over $100,000 from the time he closed in 2021! And yes, the FED has increased the interest rates since then, but the demand in Arizona is still through the roof, so the value is strong.
The Right Home For You
The average cost of a 3-4 bedroom single family home in the East Valley has been holding steady in the $400,000 range. If you’ve owned your current home for at least a year, you will have equity in your home to roll into your down payment.
FED Interest Repercussions
To put that into context, if the FED increases the interest rate like they’ve been talking about, you will see an increase in the average payment of a home priced at $400k increasing by an additional $400+ per month. That may well price you out of the market for the home size that you’re looking for.
What if There’s a Crash?
According to the analysts, we’re still in a strong market. The main difference between now and what happened in 2008 is that our housing economy today is being driven by low supply and high demand, in 2008 it was driven by unethical lending practices and low demand.
Supply and Demand
In addition to the current homebuyers, there are 140 million millennials who are now entering their home-buying years, which is driving up the demand. Conversely, there are 5-6 million too few homes on the market right now and new permits being pulled are at an all-time low. Where we used to see 27 million homes being built between the years 2000 to 2009, we’ve dropped to 6 million between 2010 and 2019!
Danger of a Crash?
Housing is not trending towards a crash, because there aren’t enough homes to go around. Until that stabilizes, we are in a strong market. Eventually, the market will reach equilibrium, either when everyone has a place to live, or when the cost of entry is too high and first-time home buyers are priced out of the market by increased interest rates.
If you’ve been thinking about getting into a new home or rolling your equity into a HELOC and purchasing an investment property, there is a narrow window of opportunity that could really be beneficial to you and your family. Ron and I would love to help you explore your options, give us a call today!