The real estate market has been rising for many years now, with home values rising and homes becoming increasingly available for purchase. However, the Arizona market is slowing down, with many homes now being listed at a price that’s considered out of reach for most.
With record amounts of home foreclosure filings in Arizona and a lack of new listings, it’s no wonder that many prospective homebuyers and sellers are staying put or looking to relocate to a different state. Here are seven things you need to know about today’s Arizona real estate market.
Foreclosures on the Rise
Foreclosures have been on the rise in Arizona for several years now, with more homes seeing foreclosure than in the state’s history. Foreclosures are typically when homeowner defaults on their mortgage, allowing lenders to take back ownership of the home. In the past two years, more than 8,000 homes in Arizona have gone into foreclosure. At the same time, the number of properties on the market has been rising, which has led to an increase in interest rates.
Home Price Decreases Have Created a sellers’ market
The real estate market has been seeing a shift in recent years in which more and more homes become available for sale, but fewer and fewer homes sell. In the past year, there were more listings per household in Arizona than at any time and more listings per square foot than at any time since 1999. At the same time, inventory is at its lowest level in 15 years. As a result, it’s no surprise that home sales have declined, and interest rates have been rising. At the same time, the number of homes going into foreclosure has increased, which has led some to wonder if this is a sellers’ market.
Inventory Is Low
The inventory levels in the phoenix real estate market have been a hot topic in Arizona in recent months. The Arizona Board of Realtors released its Inventory and Listing Standards in late February, which sparked a heated discussion among real estate professionals. The board’s recommendations are intended to help property owners maximize their rental potential and avoid foreclosure.
Still, real estate experts worry about the impact the standards will have on the market. Currently, only about 1.5 percent of properties in the United States are listed for rent, according to data from CBT Research. That number is expected to jump to 7 percent over the next five years. If the standards are strictly followed, thousands of properties will go unrented.
Buyers Are Tight On Funds
The biggest cause of concern for prospective homebuyers and sellers alike is the high inventory levels. As home sales fall behind expectations, many sellers struggle to meet interest rate increases and move forward with foreclosure. At the same time, some homebuyers are struggling to develop the funds needed to purchase a home. In the past year, more than 40 percent of homebuyers in Arizona have found a home but then had to come up with about 50 percent of the total amount for their purchase. This is usually due to record low-interest rates, rising home values, and home foreclosure.