It appears that there are many Fountain Hills buyers who are either sitting on the sidelines expecting prices to drop dramatically, or placing offers at considerably less than list price. So what is happening in the market today? Are buyers expecting too much?
1. Fewer Desperate Sellers
We were in a buyer’s market for 3.5 years from 2006 through mid-2009 which was fueled by sellers who were desperate to sell. Many were at risk of defaulting, or had already defaulted on their payments. Today, most sellers are not in a desperate situation. In fact, Arizona has one of the lowest delinquency rates in the nation. Many sellers have been patiently waiting while prices have increased so that they could be in a positive situation to sell. Many are not desperate enough to take a low-ball offer, not saying it can’t happen as you never really know the motivation of a homeowner, but I wouldn’t expect it.
2. Fewer Lender-Owned and Short Sale Properties Listed for Sale
By 2009, 70% of sales were foreclosures or short sales which forced the traditional seller to accept low-ball offers in order to sell to the few buyers that were purchasing at that time. Today however, distressed properties all over the valley are declining rapidly, accounting for only 12% of our listing inventory. In Fountain Hills you will only find 10 distressed properties for sale, placing very little pressure on non-distressed sellers to discount their home.
3. Better Job Market
In 2008 the unemployment rate had started to increase and by 2010 Arizona reached the peak of unemployment at over 10%. As of April, Maricopa County’s unemployment rate is a mere 5.2%, similar to where it stood in 2003. Since jobs allow sellers to maintain their payments and buyers to qualify for loans, declining unemployment is a positive trend that stabilizes both supply and demand.
These are just a few reasons why the buyer’s market of today is not similar to the crash of 2008. Typical price behavior at this sustained measurement is stabilization or slight decline, not a significant downfall as happened in 2008 (after an unusually long and extreme buyer’s market). Buyers can reasonably expect today’s sellers to be open to paying for closing costs, necessary repairs and a little price negotiation. However, their desperation level will not support the low-ball offer strategy of the past.
* Source: The Cromford Report*
Here’s a few homes for sale in Fountain Hills