The seller’s market is back. And that doesn’t mean that we’re going to have bidding wars and crazy over asking price offers.
If you don’t want to read all of this or watch the video, here is the gist of the market right now: The number of homes for sale is way down again, prices are up from a year ago, but down from last summer. The number of homes sold is about half of normal.
By definition we are 100% back in a seller’s market. The number of homes for sale here in Arrowhead has been on a roller coaster. Back in May, there were just 50 homes for sale and that number spiked in August to 115 homes on the market, and we’ve seen that steadily decline. Now we’re back to a level that was pretty much below where we were before the pandemic started. There’s just 38 homes on the market for sale today.
Increased interest rates are having a big impact on what’s happening in the market and the number of sales. In January, there were just 25 homes sold here in Arrowhead, which is down from a normal of about 50 homes sold for that month.
Let’s talk about what impact this slowdown in activity and increased interest rates is doing with prices here in Arrowhead. The median home price or sold home price in January was 540,000. That was a 2% increase from the same month a year ago. We’ve been on a roller coaster with prices over the past year, but we’re still at a net gain from where we were 12 months ago.
We also saw about a 4.5% percent increase in the average price per square foot, which I think is a better indicator of what’s happening here in Arrowhead.
We’re a smaller market and with the limited number of sales, that median price can fluctuate more so than the average cost per square foot. If I’m trying to compare apples to apples, that price per square foot is a better metric to look at and gauge what’s happening in the market.
One of the main problems that we’re having in our market right now is everyone that purchased a home over the past two or three years or that refinanced their home has an interest rate that’s likely under 4%. And a lot of people have, you know, low threes and some two and a half to two and three quarter percent interest rate on their mortgage.
When it’s time for them to sell the property they’re in and move up to something better, or if they’re downsizing, they’re likely looking at an interest rate that may be twice as high on the mortgage of their new home. So if someone’s moving up, yeah, they’ve got a lot of equity they can put towards a down payment on that new home, but they’re looking at an interest rate that’s twice as high.
Talking to a lot of people that are curious about buying and selling in this market, but they’re just having some incredible interest rate shock. And I think that’s keeping a lot of people on the sidelines. It’s a very interesting real estate market right now here in Arrowhead. If you’ve had any thoughts about buying or selling a home here, reach out to me.
I’d love to have a conversation with you and see what’s going on in your situation and see how I might be able to help. I’ve got 12 years experience here in Arrowhead, plus over 23 years wearing all different kinds of hats on the commercial and the residential side of real estate here in Phenix.
If there’s anything I can do or just questions you have about real estate, feel free to reach out at (480) 797-8975.