Gilbert Sun News Real Estate Guide - August 2020

REAL ESTATE

GILBERT SUN NEWS | AUGUST 16, 2020

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Gilbert housing market in unprecedented times

BY MINDY JONES NEVAREZ GSN Contributor

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low and steady might win the race but it also is the way we’d prefer to describe a market correction when it happens.

The current real estate market is pushing the boundaries of unprecedented and is one of the strongest markets in Arizona’s history at a time when many thought that it would simply cease to exist.

The extreme shortage of available housing – coupled with the booming number of buyers who are taking advantage of historically low interest rates – has forced a competitive market unlike

anything we’ve ever seen.

Sellers are selling for well above asking, buyers are refinancing on houses they’ve lived in for less than a year and everyone is wondering just how long this can possibly go on for.

That, my friends, is the million-dollar question.

And when – because it is “when” and not “if” – the market is no longer sizzling hot like it is today, will we be talking about the steadying of the market from increased inventory and decreased buyer demand? That happened over several years as builders picked up their production and interest rates slowly rose.

Or will we be wondering how we went from frenzy to fizzle so quickly?

My gut is that the tortoise will beat

out the hare every time but I’d rather be in the race than on the sidelines in the meantime.

So, how do you get in the race if you aren’t today?

Knowing your options is my number one piece of advice for everyone out there with a home, paying for someone else’s home, working from home, homeschooling from home or wanting to get a home to keep everyone at home in.

Everyone needs a home and with homes being more affordable than ever despite a 10.2 percent increase in dollar

per square foot year over year in Gilbert, it seems like almost everyone wants to find a home.

Gone are the days, at least for now, where you can walk into a builder’s fancy show room and put some money down for the floorplan.

Buyers have to be prepared, think on their toes and often make big decisions in little timeframes. That can be scary.

So why do it? Well, with only 205 homes available for sale in Gilbert,

see TIMES page RE2

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See Page 4 6

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REAL ESTATE

TIMES from page re1

builders are starting lotteries, drawings and wait lists so that they can time their builds and not take the two years to build your house that their contracts allow.

(Yes, we read the entire contract and yes, they actually have two years to build your home.)

We’ve seen first-time home buyers save thousands moving from a rental to a home of their own that they didn’t even know they could afford; couples downsizing and using the equity from the sale of their home to make a cash purchase and eliminate their mortgage as they enter their retirement years; and families build wealth through real estate by investing in their first rental property.

So, if it’s such a great time, then why aren’t more people doing it? Why aren’t more homes on the market if it’s really a once-in-a-lifetime chance to access that virtual bank account of equity?

It’s typically one of two things: either they are trying to time the market and

GILBERT SUN NEWS | AUGUST 16, 2020

not pull the trigger until we’ve reached the absolute peak or they are afraid of how it will all work, afraid of the complications of buying and selling at the same time, afraid of finding something they love as much as their current home, afraid of losing all that equity because it just feels better knowing it’s there for access when needed.

But the truth is, it’s not accessible whenever you need it – it’s accessible now.

We’re seeing the loss of some home equity lines of credit programs, greater restrictions for self-employed borrowers trying to get cash out from a refinance, and mortgage brokers prioritizing purchase contracts over refinances.

The money in your home is only valuable if you can get it and if you can release that equity from its cage, you might be feeling like a bird singing a jolly tune.

I think we’re going to see some buyers move to the sidelines because they are

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tired of fighting tooth and nail for every last bit in the contract, standing in line in 110+ degree weather waiting for a builder to call their name, and waiting up until 9:30 p.m. for a seller to agree to change the contract price when the appraisal comes in low. These are all true stories and while we’ve seen and heard in the last six months.

There is definitely a sense of urgency for sellers who want to make a cash grab.

And buyers, my only advice is to stick it out.

Unprecedented times can be scary but they can also be unique, challenging, exciting and full of opportunity.

Assemble your board of experts lenders, financial advisors, real estate agents – and let them help you understand your options and how to maximize these unprecedented times.

- Mindy Jones Nevarez, a Gilbert Realtor and owner of the Amy Jones Group at Keller Williams Integrity First, can be reached at 480250-3857, Mindy@AmyJonesGroup.com or AmyJonesGroup.com

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REAL ESTATE

GILBERT SUN NEWS | AUGUST 16, 2020

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More good news for home sellers – buyers, not so much GSN NEWS STAFF

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ellers have no reason to be jittery about the Valley’s housing market, judging by the Cromford Report’s look at last month’s home-sale data for the region, including Gilbert.

That data also indicated both good news and bad for buyers, on the other hand: while inventory is increasing slightly, prices are rising at an even quicker pace than they had in the first half of 2020.

“The housing market is extremely strong and has been hitting a number of new records in the last few days,” Cromford said, adding that inventory declined by only 3.5 percent, far weaker than in June.

“This is because we are seeing far more new listings than we got during the first half of the year,” Cromford said, adding the increase “appears to be setting in for the long run.”

Noting that closings were up 13 per-

cent over July 2019, Cromford said demand – far from being curbed by the pandemic – “has reached heights that make it very strong by any historical standard.”

And that means buyers can expect prices to rise faster – and homeowners can expect to see their houses appreciate at an even higher rate.

The average price per square foot rose 4.7 percent in July – which Cromford said would be normal year-over year but not from one month to the next.

“This happened during a summer month, making it even more remarkable, because summer months are usually rather weak for pricing, even in strong markets,” it said.

Median sale price on all 11,205 closed transactions for both new and resold homes in the county rose 13.6 percent between July 2019 and last month and the double-digit increase in appreciation is “something which we have not seen for six years,” Cromford said.

Gilbert Real Estate Snapshot

Of the total closed deals last month, new homes accounted for 1,662 – up 22.9 percent from a year ago. The median price was $363,511, up 2.1 percent from July 2019.

For the 9,543 resales, the median price soared 14.4 percent year-over-year to $317,000, Cromford said.

Cromford uses a variety of data for an index that shows how favorable the market is toward buyers or sellers in 17 Valley municipalities.

And that index shows people looking for a house in Gilbert may be especially frustrated.

With 100 on the index representing a balanced market and anything above 100 favorable to sellers, Gilbert ranks third in the Valley with a reading of 417.9 – behind only first-place Avondale (717) and Glendale (530.2).

Cromford said all this adds up to a market that is “extremely unfavorable for buyers” just about anywhere in the Valley – and especially in the East Valley,

where Chandler and Mesa rank fourth and fifth, respectively, on its index.

“Not only do they have to contend with prices rising at an unusually high rate, when they do find a house on which they would like to make an offer, they will probably find dozens of other buyers with exactly the same idea in mind,” Cromford said, adding this somber note for those looking to buy: “We do not see things improving for buyers during August and most sellers can get away with being pretty much as unreasonable as they wish to be. Frustration, tension and stress are the order of the day.”

Have real estate news?

Send to Paul Maryniak at

pmaryniak@timespublications.com

Provided by the Amy Jones Group Your Local Real Estate Team

(480) 250-3857 | www.amyjonesgroup.com • Average Days on Market: 38 days Down from 41 Days Last Month

• Active Listings: 205 Down from 224 Listings Last Month

• Monthly Sales: 585 Up from 519 Sales Last Month

• Listings Under Contract: 649 Down from 694 Listings Under Contract Last Month

• Average Sales Price: $369,000 Up from $365,000 Last Month

• Monthly Supply of Inventory: 0.8 Down from 1.0 Monthly Supply Last Month

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REAL ESTATE

GILBERT SUN NEWS | AUGUST 16, 2020

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