Wilson February MPES Newsletter

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COURTESY OF TEAM WILSON AT RUSS LYON SOTHEBY’S INTERNATIONAL REALTY

Metro Phoenix

ECONOMIC

SNAPSHOT

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2024

It’s a coin flip For an economic soft landing

By: Elliott D. Pollack & Company • 2024 Economic Outlook The Fed delivered seven interest rate hikes in 2022 which was the fastest increase of this magnitude in history and pushed borrowing costs to a 15-year high.

They followed it with four additional increases in 2023, the latest, however, occurred back in July. Since then, it has been a waiting game as new economic data rolled in over the next several months that inflation was trending down. All the while, talks of actually pulling off a “soft landing” (lowering the gap between unfilled jobs and labor supply, which minimizes actual job losses) have ramped up.

So, far, we are technically already experiencing the soft landing. Job growth has slowed but is still in very positive territory. We have gone from 11.8 million job openings in April 2022 to now 8.7 million job openings. And job seekers have increased over that time from 6.0 million to 6.5 million. So, the gap is shrinking as desired. This decreases competition for employees and lowers wage pressure, which is a key ingredient to tackling persistently high inflation.

Greater Phoenix Economic Forecast

Population 1.7% increase | 2023 1.6% increase | 2024 1.6% increase | 2025

Employment 2.2% increase | 2023 1.8% increase | 2024 2.7% increase | 2025

Retail Sales 2.9% increase | 2023 2.6% increase | 2024 5.4% increase | 2025

Single Family Home Permits

-12% decrease | 2023 15% increase | 2024 20% increase | 2025

We are not out of the woods yet.

Consensus forecasts are split 50/50 on whether or not there will be a recession in the next 12 months. Nearly every recession indicator point to there still being one. But the economy has proven to be resilient so far and household finances are historically in very good shape (consumers make up 70% of our economy). Being an election year also makes forecasts harder to make. The federal government is scheduled to spend a substantial amount of money this year from previous COVID stimulus packages. That was very likely by design to fuel economic activity. But bank lending has slowed, and interest rates are still very high. Declining availability of money and credit slows down our economy and makes us vulnerable to unforeseen shocks.

The real estate market in terms of resale homes is still in a holding pattern. Mortgage interest rates have retreated from previous peaks but are still well above rates held by current homeowners. This limits both the pool of buyers and the supply of listings.

Expectations are for rates to decline further this year.

But will likely be modest if the economy continues to grow. This has been a positive for new home building. The combination of limited resale supply and the ability of home builders to buy down a buyer’s mortgage interest rate as an incentive, has fueled new home construction. We fully expect an uptick in new home permits this year compared to last year.

Our latest forecasts for the economy in 2024 have taken into consideration a likely slowing economy over the next 12 months, recession or not. We still believe Arizona will be a preferred destination for new residents and industry. Arizona will continue to grow more rapidly than the U.S. as a whole and will create more jobs than most places. Also, as previously mentioned, new home development is also expected to increase.

Overall, a cautiously more optimistic outlook compared to last year.

2023 has ended with a huge sigh of relief for many in the real estate industry as they hope 2024 brings some much needed stability to the residential housing market.

Market emotions have run the gamut from euphoria in 2021, pessimism and panic in 2022, to despair and skepticism in 2023.

Residential Real Estate

By: Tina Tamboer | Cromford Report

So, what’s on the horizon for 2024? Hope In December 2023, the Federal Reserve bestowed a gift on the mortgage industry; not just by announcing they were not going to be raising the federal funds rate again, but by forecasting three (3) rate drops in 2024. Mortgage rates responded by immediately dropping a half point, but that alone isn’t the gift.

The most significant gift was hope; hope for an exhausted industry that the housing market can finally get back to a normal, albeit boring, rate of appreciation and sales activity. Starting off 2024, below are the year-over-year price appreciation measures for December 2023, and 6-month appreciation rates since June.

To quote Yogi Berra, “It’s déjà vu all over again” as the ratio of supply and demand indexes start off 2024 in nearly the same spot as they did 2023. While prices aren’t expected to rise at this stage, we expect lower mortgage rates to improve the number of sales, which has recorded the 2nd lowest annual count through the Arizona Regional MLS in 22 years, totaling 68,053 compared to the lowest count of 58,534 recorded in 2008.

Population data was released by the U.S. Census Bureau in November 2023,

Arizona is 7th in the nation for numeric population growth,

Dec 22

Dec 23

Change

Price Per Sq Ft

$265.90

$285.47

+ 7.4%

estimating 65,660 people were added to the state between July 2022 and July 2023.

Top Metro Phoenix cities for population growth by percentage are:

Avg Price

$516,544

$560,759

+ 8.6%

• Queen Creek (+8.2%)

Median Price

$412,000

$429,990

+ 4.4%

• Maricopa (+6.8%)

December 2022 vs December 2023

• Goodyear (+4.2%)

June 2023 vs December 2023 June 23

Dec 23

Change

Price Per Sq Ft

$287.67

$285.47

- 0.8%

Avg Price

$581,625

$560,759

- 3.6%

Median Price

$443,000

$429,990

- 2.9%

You may have noticed that the annual appreciation rates show an increase in price measures while the last 6 months show a mild decrease. December 2022 proved to be the bottom for home prices in response to dramatic increases in mortgage rates. After that, the buyer’s market turned and moved back into seller market territory, pushing sales prices up 7-12% (depending on the measure) in the first half of the year before further mortgage rate hikes put the kibosh on appreciation and it stagnated. By October, mortgage rates peaked at 8% and in November the seller’s market had turned into a balanced market once again. Which brings us to the present state of hope.

Since the announcement by the Federal Reserve on December 13th, 2023, the Greater Phoenix housing market has turned again, out of a balanced market that lasted 7 weeks and back into a weak seller’s market.

Growing incomes and declining mortgage rates, combined with slow appreciation in home values, mean that Greater Phoenix affordability measures should show a positive and notable improvement in the first quarter of 2024. All things considered, the outlook for the upcoming year is positive for the housing market. If rates continue to gradually decline and stabilize, sales are projected to gradually increase, and prices are projected to rise at a modest rate. This will provide much needed relief and recovery to the industry professionals and organizations that support homeownership.

Hope is a good thing.

AVERAGE SALE PRICE

BY CITY

2022

01/01/22 - 12/31/22

2023

01/01/23 - 12/31/23

Spread the Word!

CHANGE 2022 VS 2023

METRO PHOENIX

BY THE NUMBERS

Goodyear $425,614 $512,393 + $86,779 Glendale $365,822 $443,523 + $77,701 AV E R A G E S O L D P R I C E Jeremy, Elizabeth, and the rest of Team Wilson are Phoenix $427,300 $522,252 + $94,952 hands down the best$378,992 realty team I have ever had Mesa $441,255 + $62,263 the pleasure of working with. They take Peoria $450,762 $530,892 + $80,130 professionalism to the next level! Always quick to Litchfield Parkand $477,911 $541,072 Jeremy, Jeremy, Jeremy, Elizabeth, Elizabeth, Elizabeth, and and the the rest rest rest ofofofTeam Team Team Wilson Wilson are are are + $63,161 respond, on top ofthe all the details, andWilson they show Tempe $408,068 $475,687 hands hands handsdown down down the thebest best best realty realty realty team teamItheir Ihave Ihave have ever ever everhad had had + $67,619 thatthe they truly care team about clients Gilbert $527,266 $624,300 + $97,034 the the the pleasure pleasure pleasure ofofofworking working working with. with. with.

They They They take take take Best REALTORS® ever and forever my go to.

Chandler to $494,561 $577,681 + $83,120 -next Virgil N. Always professionalism professionalism professionalism to to the the the next next level! level! level!

Always Always quick quick quick to to to REASON #1: PASSIVE INCOME Cave Creek $783,846 $962,280 respond, respond, respond, on on ontop top topofofofall all allthe the thedetails, details, and and and they theyshow show show With a well-diversified portfolio ofdetails, properties andthey investments will + $178,434 Fountain Hills $707,446 $813,351 + $105,905 provide you withcare financial security for years to come! that that that they they they truly truly truly care care about about about their their their clients clients clients We have used The $911,840 Wilson Team to purchase Scottsdale $1,108,959 + $197,119 Best Best Best REALTORS® REALTORS® REALTORS® ever ever ever and and and forever forever forever my my my go go go to. to. to. #2: TAX BENEFITS multipleREASON homes. They are extremely attentive, Carefree $1,053,155 $1,210,470 + $157,315 --Virgil -serve Virgil Virgil N. N.N. from your You&can deduct expenses taxes, that diligent eager toseveral their client.

It seems Our business continues to that can save you a significant amount of money each year!

Paradise Valley $2,639,978 $3,775,258 + $1,135,280 AVERAGE INCREASE IN SALE PRICE no matter what the challenge might be they work grow with your support.

REASON #3:it LEVERAGE to make it happen & do with great credibility & You can use leverage toWilson finance portion of the purchase price.

We We We have have have used used used The The The Wilson Wilson Team Team to toto purchase purchase purchase honesty.

They haveaTeam our full trust & AVERAGE Days on List/Sell # Homes This allows youalways to control assets for arealtors. smaller investment. multiple multiple multiple homes. homes. homes.

They They They are are areextremely extremely extremely attentive, attentive, attentive, will belarger our "go to" We look forward to meeting more Sale Price Market Price Ratio Closed BY COMMUNITY Howard & Sheryl G. diligent diligent diligent &&&eager eager eager to toserve serve serve their their their client. client. client.

ItItItseems seems seemsthat that that REASON #4:to SAVE TIME WITH A SYNDICATION people who we can serve. If you know Eastmark $617,989 76 99% 373 You can what also leverage other people’s time bybe passively investing no no nomatter matter matter what what the the thechallenge challenge challenge might might might be bethey they theywork work work someone with a real estate need, real estate&& projects.

This enables you to bypass &&& Fulton Ranch $1,119,659 77 97% 28 to totomake make makeititinithappen happen happen &do do doitititwith with with great great great credibility credibility credibility the project management piece of managing a project,this please introduce us.

I have nothing but praise for Jeremy regarding honesty. honesty. honesty.

They They They have have have our our ourfull full full trust trust trust &&Crossing &project.

Ironwood $460,419 75 99% 112 and simply gather your profits the end of the transaction.

If I were to buyator sell again my first will will willalways always always be be beour our our "go "go "goto" to" to"realtors. realtors. realtors.

Las Sendas $1,030,738 75 98% 29 call would#5: be APPRECIATION to Jeremy Wilson.

REASON --Howard -Howard Howard & & & Sheryl Sheryl Sheryl G. G. G. Lindsay $615,936 52 101% 17 - Robert W. By investing in real estate, you can buildRanch equity that will increase in value over time.

Mountain Park Ranch $587,128 50 98% 89 Ocotillo Lakes $712,693 44 98% 15 REASON #6: CASH FLOW I Ihave nothing nothing but but praise praise for for Jeremy Jeremy regarding regarding this this Ihave have nothing but praise for Jeremy regarding this you have positive cash flow, you can useRanch that money 2023IfSALES STATISTICS Power $562,759 60 99% 150 transaction. transaction.

IfIfI Iwere to totobuy buy ororsell sell again my my first transaction.

Iwere were buyor sell again myfirst first to Ifreinvest in other properties or again other areas.

Seville $690,052 60 98% 136 call call would be totoJeremy Jeremy Wilson. callwould wouldbe beto JeremyWilson.

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REASON #7: IT’S A TANGIBLE ASSET Superstition Foothills $674,948 49 99% 28 EAST VALLEY --Robert W. W. -Robert Robert W. You can see, touch, feel, and even live in real estate JEREMY & ELIZABETH Val Vista Lakes $823,300 54 98% 5 as opposed- to stocks and bonds, which are intangibles.

01/01/2023 12/31/2023

7 Reasons to Love Real Estate Spread Spread Spreadthe the theWord!

Word!

Word!

$177,629

Integrity.

BY COMMUNITY

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Luxury is not a price point, it’s a lifestyle.

Experience. 480.677.9238 Integrity.

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Results. Innovation.

Our approach to real estate begins with Integrity. Experience.

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Innovation.

Results.

Integrity.

Integrity.

Integrity.

Experience.

Experience.

Innovation.

Innovation.

Innovation.

Results.

Results.

Results. you and your “why.”

TeamWilson@RussLyon.com

Statistics gathered from ARMLS. All All information deemed reliable butbut notnot guaranteed.

(Single-Family Residences) Statistics gathered from ARMLS. information deemed reliable guaranteed.

(Single-Family Residences)

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If your home is currently listed, this is not a solicitation for that listing.

Produced by Prime Source & DLP • 480.921.0511 • PrimeSourceAZ.com

If your home is currently listed, this is not a solicitation for that listing.

Produced by Prime Source & DLP ∙ 480.921.0511 ∙ PrimeSourceAZ.com