Blog > Everyone Says the Housing Market Is Bad…
There’s an old investing saying:
“Buy when there’s blood in the streets.”
It’s generally associated with Baron Rothschild. Warren Buffett later made a similar point when he said investors should be fearful when others are greedy and greedy when others are fearful.
No, there isn’t “blood in the streets” in Phoenix real estate.
But I think the idea behind the quote is worth talking about.
WHEN EVERYONE SAYS THE MARKET IS BAD...
I hear it all the time right now.
From buyers. Sellers. Past clients. Friends.
“The real estate market is bad.”
And I understand why.
Mortgage rates are high. There are more homes for sale. Homes are taking longer to sell in many areas. Price reductions are more common. And if you read enough headlines, it can feel like things are only getting worse.
But headlines usually try to describe the entire housing market with one sentence.
Real estate doesn't work that way.
Arizona isn't the entire country. Phoenix isn't all of Arizona. And Queen Creek, Gilbert, Chandler and Scottsdale don't even have the same market.
The latest numbers make that very clear.
Chandler's Cromford Market Index is currently 127.1, which still favors sellers.
Gilbert is 104.5, which is roughly balanced.
Queen Creek is 51.1, which strongly favors buyers.
Three neighboring communities. Three very different markets.
That's why I'm always hesitant when someone tells me what “the real estate market” is doing.
My first question is:
Which real estate market?
HOMES ARE STILL SELLING.
I also keep hearing:
“Homes aren't selling.”
That's simply not true.
Homes are selling every day. I can see it in the MLS, and I'm personally selling them.
I've had sellers in this market sell at asking price and above asking price. I've had homes sell within days or weeks.
I even recently sold one particular home twice within about two months — both times around or above $1 million.
That's actually a pretty interesting story. If you want to hear it, call me and I'll tell you what happened.
The important point is this:
A slower market doesn't mean homes don't sell. It means the right price, condition, presentation and strategy matter more.
FOR BUYERS, “BAD” CAN ACTUALLY CREATE OPPORTUNITY.
I've been working with quite a few buyers lately, including buyers looking at more affordable price points.
And I've seen some really nice homes.
Some are move-in ready. Some need a little TLC. Some have been sitting long enough that the seller is becoming much more motivated.
And that's where today's market gets interesting.
Think about what happened when everyone thought real estate was great.
Twenty buyers wanted the same house.
Offers went over asking.
Sellers didn't want to make repairs.
Buyers waived things they normally wouldn't waive.
There wasn't much room to negotiate anything.
We called that a “great housing market.”
But was it great for the buyer?
Today, fewer buyers are competing for many of these homes.
That can mean more choices and more negotiating power.
Depending on the property, I'm seeing opportunities to negotiate price, repairs, closing costs and sometimes money toward an interest-rate buydown.
AND THAT'S WHAT I MEAN BY A “DEAL.”
I want to be very clear about this.
This is not 2009.
I don't see evidence that Phoenix homes are suddenly going to be 50% off, and that's not what I mean when I say there are deals available.
A deal doesn't always mean buying a $500,000 house for $400,000.
Maybe the seller accepts less than asking.
Maybe they agree to make repairs.
Maybe they contribute $10,000 toward your closing costs or interest rate.
Maybe you find a home that needs some cosmetic work that other buyers overlooked.
Or maybe you simply get to buy the house you actually want without competing against 15 other people.
Those things have value.
A “deal” is different for every buyer.
WHAT ABOUT INTEREST RATES?
This is the elephant in the room.
Mortgage rates recently jumped from about 6.89% to 7.45% in only 16 days.
That's significant, and it absolutely affects affordability.
But here's where I think buyers need to be careful.
Nobody knows exactly where rates are going next.
Not me. Not the person on TV. Not the guy on YouTube predicting the next housing crash.
Earlier this year we saw rates much closer to 6%. Today they're above 7%.
Could we see rates with a 6 in front of them again? Absolutely.
Could we briefly see something in the high 5s someday? It's possible.
Could rates remain higher than people want for longer than expected? Absolutely.
I wouldn't buy a house today assuming rates are going to fall.
Instead, I would ask:
Does this house make sense for me at today's price and today's payment?
If the answer is no, don't buy it.
But if the answer is yes, don't automatically dismiss the opportunity because you're waiting for the perfect interest rate.
Because here's the other side of that equation:
What happens if rates eventually fall and thousands of buyers who have been waiting decide to start shopping again?
More buyers can mean more competition and less negotiating power.
A lower interest rate doesn't automatically mean you'll get a better overall deal on the house.
THERE'S ANOTHER CHANGE HAPPENING THAT HOMEOWNERS SHOULD WATCH.
Homebuilders have pulled back.
Through August, Arizona issued 20,970 single-family building permits, the lowest January-through-August total since 2017.
And look at some established Valley cities:
Gilbert: down 43%
Mesa: down 36%
Peoria: down 31%
Phoenix: down 10%
Mesa: down 36%
Peoria: down 31%
Phoenix: down 10%
Meanwhile, more new construction is shifting farther toward the edges of the Valley.
Why does that matter?
Because today's permits become tomorrow's houses.
If fewer new homes are being built in established areas, resale homeowners in those communities could eventually face less competition from brand-new construction.
It's one more reason I don't think our market can be explained with a headline saying simply “good” or “bad.”
SO, IS NOW A GOOD TIME TO BUY OR SELL?
I don't think that's the right question.
The better question is:
Is it a good time for YOU?
If you're a buyer who needs the perfect interest rate, no repairs, a huge discount and a guarantee that your home will appreciate next year, you may want to wait.
But if you're financially comfortable with the payment and you've been waiting for more inventory, fewer competing buyers and sellers who are actually willing to negotiate, I think this market deserves a serious look.
And sellers shouldn't panic either.
Good homes are still selling.
But this isn't the market to simply put a house on the MLS, pick an ambitious price and hope somebody shows up.
Pricing, condition, presentation and strategy matter.
That's really the message this week.
Don't buy because someone tells you it's a great market.
Don't sell because someone tells you it's a great market.
And don't sit on the sidelines simply because someone tells you it's a bad market.
Look at the actual numbers for your situation.
Sometimes the best opportunities happen when everybody feels confident.
And sometimes they happen when everybody else is afraid to participate.
If you've been thinking about buying or selling, call, text or email me. I'll show you what's actually happening in your neighborhood, your price range and your situation.
Then you can decide for yourself whether there's an opportunity worth taking.
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