The Real Estate market is forever changing. Factors beyond our control has a tremendous affect on the United States Real Estate market. It is impossible to forecast market conditions, but it is imperative to know where we are today by looking at recent events to make an informed decision about buying or selling Real Estate in Arizona.
Right now in Arizona, it is becoming harder and harder to get a loan for a few different reasons. Many banks in Arizona have gone out of business because of an extremely high foreclosure rate. The reason many banks went out of business is because these banks home buyer approval standards were too low. When something like this happens, the other banks that are still in business begin to tighten up their home buyer approval standards. The banks now are requiring more documentation on buyers, and raising the bar when discussing getting approved for a home loan. Banks are going to want buyers that have higher credit scores, make more money, and have a very good work history.
About a year ago, the Arizona market was booming, it was nearly impossible to get a home without competing with four or five other buyers for the same home. Out of state investors were coming in and buying up a lot of Real Estate in Arizona because the interest rates were at a nearly all time low, and home prices were affordable. Investors drove the home prices up to a point where it became un-affordable to low and average income families. Home builders in Arizona decided to start building massive communities to feed the investor frenzy. The prices topped out, and began to fall. On top of this fall, the interest rates started to climb. Now, in many areas of Arizona, builders are stuck with homes that are built with no one to buy them. Residential re-sale sellers are having the same problem. Who would buy a home in Arizona when home values are dropping, and interest rates are climbing?
Over the last few months, prices have continued to drop. Sellers and builders are giving buyers incredible incentives to buy. A few weeks ago in the United States, Wall Street took a big hit because of foreign market fluctuations. There was a huge loss on Wall Street and worried many that the United States may be facing another recession. The United State economy thankfully started to bounce back after the big loss. What does this mean for the consumer?
When Wall Street takes a hit, and the United States economy indicates a possible recession, they drop the interest rates to stimulate the market. The interest rates at this point in time are actually very good. Many sellers in Arizona right now are re-financing, and many buyers are beginning to buy because the prices have dropped to a point were the average person can afford a home. When the prices start to level out, and the interest rates drop, it may be an extremely good time to buy in Arizona right now. If you have a high interest rate and you are a home owner, now is a great time to re-finance your home. It is not the best time to sell right now, but not impossible. The home just needs to be priced correctly. The days buying a home one month, and selling the home a month later for a forty thousand dollar profit are gone, for now. So if you are selling, you home needs to be in the top one or two in the neighborhood when talking about price per square foot.
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