Too Much Anxiety In The Arizona Real Estate Market?

Good morning. Welcome to the Rick Helps real estate show today. We're going to go over some of the numbers in our market, and we're going to see just exactly how it's shaking out here in the Arizona real estate market. We're supposed to get rain today. There's a tropical depression that was coming up through the Baja and it's weird. It just, it's stuck. I always look at the radar on my phone to see if rain's coming and it's stuck. It went partway up and it's just sitting there spinning. And so we're not getting the rain, which is too bad because we really wanted to see some of these fires get put out, especially the one over by superstition lost Dutchman state park and Canyon lake. So anyway, what are we seeing going on in the market? We all know what the jitters are, the election, and I've, I've spoken about the election quite a bit saying it's historically never made a difference. Uh, but it causes people anxiety. Well, uh, Michael or from the Cromford report finally wrote about the election and said that every year people ask if the presidential election has a significant impact on the housing market. The short answer is no. So there's always a few buyers who loudly claim they are deferring any home purchase decision until they find out the results of the election. These people are a tiny portion of the total insignificant in the overall context. In fact, if we examine the volume and sales in five months leading up to November election, we find that in two, four and 20 home sales were stronger than normal and non-election years in 2012 and two 16 home sales were in line with normal 2000, 2008 home sales were weaker than normal and then non-election years, notice that each line includes one win for the Republican nominee and one win for the democratic candidate. So sales volume does not even seem to correlate to who wins bottom line here. The long answer is do elections affect real estate in the long answer and the short answer is no. And you think about it, you know, campaigning numbers just get tossed at you like candy. You know, we're going to do this. We're going to do that. But whatever proposal they come out, like the one for $25,000 for down payment, which I'm vehemently opposed to just because it's just going to heat up the market, but eat, leave and sell. They propose it. The elections in November inaugurations, not till January. It's got to go to Congress. You're a year out before stuff like that even starts to show up. Even though I've heard agents say that people have called them and said, how do I get that 25,000? People don't follow the news as closely as you think they do. So it's quite interesting to see the perceptions that are out there. The other thing I want to look at here in our market too, is our contract ratio. And it's here. It has gone down from 40 to 37 to 36.1, but it's in the balance market. See that white area there. It's almost cold. And you can see that we've been there before, uh, 2022. We were there contract ratio. This is your success rate on selling your home. Look at here in the silly season, 281.2 big difference. So, but nothing alarming there, except it's just painfully slow. Now, if you look at the numbers down in the bottom here, you can see that we're above 19,000 listings today. Now we haven't been above 19,000 listings since who knows when. If I take a look at our active listings here on this chart, we are up at 2022, 2022, we had 19,422 two years ago. And we're almost there. We're knocking right at the door. So what's happening? Well, it's interesting. When I look at canceled listings, they're actually going down. People that were putting a house on the market saying, well, I gotta, I gotta cancel this. I'm done. And you can see that we have new contracts at 2,900 and earn it. New listings, 2,900 new contracts at 2,500. So there's that 400, 500 unit gap. Haven't seen an explosion in new listings, but the gap is kind of widening. Uh, we've gone up with new listings coming on the market by about 200 homes. And yet our contracts are hovering at 2,500. As long as they hover there and we're going up about 200, the total number of listings available is going up. It's not exploding, but it is increasing. And it tends to do it seasonally. Anyway, as you can see here, you have to ignore these years down here, the 2021 and 2020, because that was just disaster, but you can see that seasonally we go up, let me go back to 2019, they went up. So that's kind of where we're at in this market. And, you know, and everybody's waiting for interest rates, the central bank's going to meet in two days. And, uh, I think no matter what they do, you're not going to see this number change much at 6.14. The anticipation of a rate cuts already baked into the cake. So we'll see what happens. This is a percentage of closing with seller paid concessions. It's way up here. And what I'm paying attention to is this number. Did it jump because of the, um, new requirements on how a buyer compensation is paid? Are they paying it through seller concessions? I think that's probably the main driver on that, on that number. So, but time will tell, we'll just keep watching it. This is a big chart that shouldn't be this big. What am I looking at here? Let me shrink this. I believe we just looked, Oh, it's the Cromford market index. Okay. Now you can see here, it's starting to go down just a hair. Well, last week we were at 98.4. Now we're 97.3. Total market is in a balanced zone with the exception of some outlying cities like Buckeye and Maricopa and, uh, even parts of, uh, Queen Creek, uh, buyer's market. Surprisingly though, the higher end in Scottsdale, Paradise Valley, high end homes in places like Northeast Mesa and Queen Creek. Um, you know, there's a development in Queen Creek. The homes are on this one area. They're all about $10 million. They're doing well. I talked to an agent yesterday and she's got seven listings and she said it's been pretty doggone brisk. And her average listing is about $2 million. So they're not getting hurt. That's pretty much driven by the stock market. And a lot of that is driven by cash. You can see here that our pending listings in our market actually went up. Now it went down here because of labor day. So, but we're coming back up to kind of where we were, but we're still below where we've been the rest of the year. So it's not a number that is spiking up. It's just a number that is trying to get out of the basement. Just can't seem to make it. We are seeing new listings showing up kind of scattered. It's not happening in any one particular price point. It's just kind of out there. And here's an interesting one that I found this morning, and this is percent of closed end first lien mortgages outstanding by interest rates. In other words, what kind of notes are out there? What do people have? A little bit complicated, but you see this bottom blue number down here. These are people that have mortgages that are below 3%. 20% of people have a note below 3%. This one here, the blue between three and 4%. Okay. And that's up to almost half 55%. Here's another number here between four and 5%. And you can see that there's a very small percentage of people here that have a mortgage over 6% thus sitting on their hands. This one here is interesting too. You're going to start hearing, you know, mortgage delinquencies, foreclosures, not seeing it. These are national numbers. Our numbers are even lower. 30 to 60 days out. That's the blue line. It's trending kind of at, or well below normal. See that right there. And obviously this is when things fell off the earth, but nothing alarming there, not even hitting 4%, we're hitting 3%. The other number that you see here is 90 days and that's a small number and the foreclosure process. Ones that have not been able to satisfy what they owe is really tiny. So it's not there yet folks, uh, waiting for foreclosure is going to be a, going to be a tough one to swallow and Zillow stock surges as analysts say, start buying as mortgage rates fall. Well, yeah, no, um, mortgage rates are falling. Start buying before they fall. It's, it's going to take a while and it's going to take a big move for mortgage rates before buyers get off the fence and start running towards. Going out and buying a home with the exception of what we're seeing out there in the new build communities this month, their year end closeouts are about October, November. They're throwing everything at you, including the kitchen sink, 3.9%, 30 year fixed rates. Uh, they're, they're discounting their spec home. So if you're in the mood for new construction, which is kind of in the outlying areas, Buckeye, Maricopa, um, they are giving you everything and, uh, try, I was planning on getting out the blossom rock today to do some filming out there in Apache junction and kind of show you what that's all about. My day got a little stacked up, so I'm not going to make that one. Uh, but new construction is doing, doing fairly well. Uh, the number of new permits is not exceeding to a dangerous level. They have pulled back as they see things start to slow down a little bit. Uh, they're looking at other outstanding debts, such as credit cards that those numbers are getting kind of alarming. And, uh, especially since what they're saying is there's not only more credit card debt, but there's more purchases being done with credit cards for basic needs, such as food, et cetera. So that, that can derail economy pretty, pretty quick if it happens. Good morning, Renee. I'm trying to be all sunshiny today. So, um, there is anxiety out there and I get it. And I don't mean to belittle anybody that says that they're waiting for the election to be over, because it's just, they're irritating. I can't wait for the ads to quit. I just watch them and I shake my head. Um, I can't wait for all the signs that are on the intersections to go away. They just junk up the neighborhood. And, uh, so it's a process that I want to see subside and let us all go. But for now the market is resilient. It's weak, but it's not falling off a cliff. Uh, Arizona jobs are increasing exponentially. Um, a lot of people moving here, like it or not a lot of data jobs and, uh, chip manufacturing plants. So we're, we're doing well, my friends. And, uh, but you know, we just got to continue to watch it and see what happens. Stay tuned for the 18th. I may come on and we'll talk about what the central bank did. And then we'll look and see if indeed it did affect mortgage rates. It may or may not. Uh, but people waiting for the fed to make the move for to see an effect in mortgage rates are probably going to be disappointed because we're going to have to listen to what they say. And that'll have more of a movement on rates than versus what they do. So let's say they go down 0.5. Oh, the market's going to go whole hum. But what if they say, however, we are looking at making more aggressive reductions going forward for the rest of the year. Now you're going to see a movement in rates if that happens. So let's stay tuned. Let's chime in on the 18th and see what's going on until then. Have a great Monday. Take on the rest of the week. Take care.