With the new year in sight, out-of-state homebuyers aren’t taking a break.

Let’s kick off one of the last market updates of 2020 with some wild stats from November: 

• 8,284 homes came on the market this year versus 7,788 last year (a 6.3% increase)

• 12,108 homes were active this year versus 16,289 last year (a 26% decrease)

• 9,209 homes sold this year versus 7,134 last year (a 29% increase)

• Inventory was down 57% from 2.28 months last year to just 1.31 months this year 

Despite having significantly less inventory to work with this year, more homes are selling in the fourth quarter. Part of the reason for this is that a ton of out-of-town buyers have been moving into our greater Phoenix area; as an Arizona native, I’ve never seen so many out-of-state license plates before, and I’m not just talking about the influx we see usually in the winter months. 

Since summer, people have been chomping at the bit to capitalize on historically low rates—just two days before the recording of this video, the national average for a 30-year fixed mortgage dropped to 2.71%! Consequently, many homebuyers who were previously unable to qualify are flooding into the market at this very moment. I’m shocked by how low the monthly payments are for some of the bigger homes in our area. Why wouldn’t folks take their equity and trade up to a larger home for the same—if not lower—monthly payment? 

“If you got qualified today at $500,000 and rates jumped up from 2.71% to 3.71% tomorrow, your purchasing power will have dropped to $450,000.”

In addition to first-time buyers who got fed up with renting, we’re also seeing plenty of California buyers who think everything here in Arizona is 50% off. (Considering the exorbitant real estate market they’re used to, that might as well be the case). With all this crazy demand in our market, it’s important to keep this danger in mind: If rates go up 1%, your purchasing power drops by 10%. That means if you got qualified today at $500,000 but rates jumped up from 2.71% to 3.71% tomorrow, your purchasing power will have dropped to $450,000. 

So, it’s easy to see why so many people are scrambling to lock in a great rate and guarantee themselves a low payment for the life of their loan. 

If you’re considering buying, selling, or both, please reach out to me by phone 602-738-9943 or email soon. I’d love to talk you through the process and help you maximize your position.