REAL ESTATE

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Realtors group sees more homes going on market

ARIZONAN NEWS STAFF

The official website of the National Association of Realtors foresees an increase in for-sale homes in the near – and, not surprisingly, other experts also see an increase in their price. Based on a nationwide survey of 1,200 homeowners, Realtor.com last week said, 26 percent of the respondents “plan to sell their home in the next 12 months.” “Younger generations seem to be more eager to sell as 34 percent of Gen Z homeowners and 49 percent of millennial homeowners plan to sell, while only 26 percent of Gen X homeowners, 11 percent of baby boomers and 8 percent of the Silent Generation plan to do the same,” it said, adding that younger homeowners in urban areas were especially inclined to put their houses up for sale. But buyers who might be salivating at the prospect of more choices also need to be prepared to pay higher prices. “Buyers should be ready for high asking prices,” saidGeorge Ratiu, manager of economic research for Realtor.com. “But an increase in new sellers could mean some relief from the inventory crunch.” The Cromford Report, which closely watches the Phoenix Metro market, offered an even blunter assessment, noting that “despite some observers speculating that a market top has taken place, the data emphatically suggests otherwise.” “The short-term outlook is for prices to move higher into record territory,” it later said. Sales of existing homes increased by 6.6 percent in October over October 2020, Cromford said, even though total home sales year-over-year were down 8.5 percent. But that was because new home sales plunged 22 percent from October 2020 to last month as a result of “the inability of the builders to complete home construction (shortage of components, supply chain delays, labor shortages), not because of lack of demand,” Cromford said. Ratiu offered a cautious assessment of the prospects for a larger inventory, noting that that many sellers are also buyers. “Once they sell their properties, they have to compete for somewhere else to live,” he said. “That’s tough in this turbo-charged market, where there isn’t even much new construction for move-up buyers. “The main challenge many may have is finding a suitable replacement home, given the still very tight number of homes for sale,” Ratiu said. Meanwhile, Fannie Mae recently said that median home prices would to rise 7.9 percent over the next and that mortgage rates will likely climb next year, with the average 30-year fixed rate rising from 3.1 percent to 3.4 percent. And Forbes Magazine said buyers are becoming more risk-averse. “Similar to how the pandemic triggered a sanitizer and toilet paper buying spree, consumers also flocked to the real estate market last year,” it said. “As demand for houses picked up, interested buyers have pulled out all the stops to outbid the competition. “This caused all sorts of strange and perhaps reckless behavior, including buyers forgoing contingencies in the sales contract meant to protect them and their earnest money, which can amount to thousands of dollars. Some buyers were using their retirement savings, while others were getting loans so they could appear to be all-cash buyers.” But Forbes reported “this going-forbroke approach could be declining,” quoting a Colorado broker who sees buyers are realizing “that they might be putting too much on the line and are taking the power position back once they go under contract.” “I do not see the same level of desperation and urgency we saw a few months ago,” the broker said. “After large price increases, many properties just don’t feel like such a good deal anymore.”

Forbes said buyers waiting on the sidelines should start getting their finances in order now lest they miss out on a good deal.

It suggests would-be buyers work on their credit score now, noting people can get weekly credit reports from all three ratings agencies for free until April 20.

“Keep in mind that as home prices rise, so does your down payment requirement. What was a 5 percent down payment on a house last year is much higher this year as home prices continue to tick up, so keep saving and exploredownpayment assistance options,” it said.

The Arizona Housing Finance Authority (Home Plus Program helps qualified homebuyers get down payment assistance via a deferred no-interest second mortgage. The down payment assistance second mortgage is forgiven after three years, as long as the homeowner lives in the home. If the borrower sells or refinances the mortgage within the first three years the down payment assistance loan must be repaid. Eligibility requirements include: the borrower’s annual income qualification is partly determined by your lender but typically must not exceed $112,785; one borrower must complete a homebuyer education course before closing; a minimum credit score of 640 or better. It also suggests less experienced buyers find a housing counselor. The U.S. Department of Housing and Urban Development has a directory of free, HUDapproved housing counselors at apps. hud.gov/offices/hsg/sfh/hcc/hcs.cfm.

This 3,118-square-foot house on W. Coconino Drive in Chandler recently sold for $1.1 million. The four-bedroom, three-bath single-story house, built in 2007, boasts private guest quarters with a private entrance and a number of high-end amenities. (Special to the Arizonan)