Homes are selling briskly in the North Valley
By Christina Fuoco-Karasinski
BUYAZRE founder Asher Cohen has done his research on North Valley ZIP codes, and he sees homes selling briskly.
“When it comes to the North Valley, we’re seeing listings move very quickly,” Cohen says. “Homes for sale in this area stay on the market for an average of just 72 days before selling. Also, home prices are up more than $219,000, compared to December of 2019.”
The housing market is looking strong for the Phoenix area in 2021. In fact, Realtor.com’s most recent forecast predicts home sales in the Valley will jump 11.4% over last year, which is the 11th largest expected increase among the top 100 metros in the United States.
With that said, North Scottsdale, Carefree and Cave Creek are at the top of the list when it comes to sought-after Arizona locations. The combination of beautiful weather, prestigious restaurants and shopping, specialty education, golf courses, a plethora of hiking paths, equestrian-friendly communities, a reasonable cost of living and now the ability to work from home continues to draw people from out of state to the area.
“For all of those reasons, Downtown Phoenix dwellers also have their sights set on our northern ZIP codes because they want to break free from high-rise apartments and city living,” Cohen says. “North Valley is particularly appealing because many of the homes on the market offer spacious square footage and a decent chunk of land.”
For those looking to buy or sell this year, many changes that have been implemented in the real estate industry because of coronavirus will stick around, such as virtual open houses, e-offers and remote closings. But there are a ton of other positive expectations for the Phoenix real estate market, including very low and affordable mortgage rates.
Right now, the 30-year fixed rate is hovering around a 50-year low of 2.75%. Refinancing rates are also hovering around 2.45%, which makes the refinancing route a smart move depending on long-term goals.
“If you’re already a homeowner and finding ways to save money has become a priority during the coronavirus pandemic, you should consider refinancing, especially if your current interest rate is 3.5% or higher,” Cohen says. “Refinancing not only provides an easy way to lower your mortgage payments, but it also gives you the option to take cash out of your home to pay off high-interest debt like credit cards while keeping your monthly payment the same.”
Another expectation for the Phoenix housing market is that inventory will stay sparse, which is good news for sellers.
“Figures that were just released in January show inventory in the metro area was down 37% compared to this time last year,” Cohen says.
Low inventory combined with low mortgage rates and an influx of people moving to the area is the perfect storm. There are only 480 single-family homes for sale in ZIP codes 85331, 85262, 85266, 85054, 85050 and 85255.
“And to give you a better idea of how quickly homes in these areas are moving, 144 more homes were sold in those ZIP codes in December of 2020 compared to December of 2019,” Cohen says.
Because of this, offers will continue to be made sight unseen. Buyers have adapted to virtual tours, and many who are looking to relocate are comfortable making an offer without seeing the property in person in order to seal the deal, which creates a strong potential for bidding wars.
“A nice profit could be on the horizon, but be sure to wait for the right offer,” Cohen says. “Some buyers still may try to hit you with a low number because they aren’t aware of the current climate, which is a seller’s market. So, if you’re not in a hurry to move, wait for an offer that gives you the most profit.”
First-time homebuyers will remain a strong force in 2021 as well. While younger Gen-Z buyers are expected to play a growing role in the housing market, the largest group of millennials are now in their mid-30s. Additionally, the oldest millennials are increasingly contributing to the trade-up market. This new wave of demand from renters looking to buy their first home is attributed to the low rental inventory.
“It might sound crazy at first, but if you can hold on to your current home and rent it out, now is the time,” Cohen says. “Think about it. The average rental home in the Phoenix metro area goes for $2,000 a month and, in some neighborhoods, well over $2,500 a month. Why not consider this option when there are ways to use the equity in your current home to buy your next home without selling it?”
Another trend that is expected to remain strong in 2021 is buyers will continue to put more than 20% down on a new home to avoid paying for mortgage insurance.
“Buyers who throw a bunch of cash down will not only have lower mortgage payments and possibly lower interest rates, but sometimes an appraisal isn’t needed, which could save an average of $600,” Cohen says. “Sellers also see this as a positive when they’re reviewing multiple offers, which happens more often than not.”
Lastly, new construction will continue to blow up. A shrinking supply of buildable lots is causing more homebuilders to focus in on Arizona’s raw acreage. Builders such as D.R. Horton, Pulte, Taylor Morrison and Shea Homes will keep building communities that generate interest before construction even starts.
“Homebuyers are focused on the suburbs, because the burbs are where it’s at,” Cohen says. “Coronavirus and the wave of working from home has buyers seeking hot ticket items such as casitas or guest houses as designated kid zones, home offices and gyms or a place for extended family members to stay.”
Priorities have changed in 2021 in response to COVID-19, and many buyers aren’t waiting for a return to normal. Instead, they’re anticipating a “new normal” in which they live, work and entertain and their home has become the true definition of a sanctuary. If the above expectations continue to stay strong, there is no anticipation of any sort of slowdown in the housing market.
When buying or selling any sort of piece of property, it’s most important to work with a licensed real estate professional who understands your wants, needs and long-term goals to make the transition from one home to another as smooth as possible, Cohen says. The housing market in the Phoenix metro area is a fast-paced world, and it’s not going to slow down anytime soon, he says.
Leave a Comment
You must be logged in to post a comment.