Eeny, meeny, miny, moe catch that escrow by its toe.
The Southeast Valley housing market right now is “absolutely on fire,” Realtor Jen Schumacher said, and it’s a matter of the best offer wins the home.
“Right now, there is no inventory, so when there is a home on the market, its going within hours with multiple offers. People are waiving their appraisal contingencies. They are going sometimes $10,000, $20,000and even $50,000 over the listing price,” said Schumacher, who hangs her hat at Russ Lyon Sotheby’s International Realty in Gilbert at 275 E. Rivulon Blvd.
The pandemic has not dampened the booming housing market and may have even given people the itch to buy and sell, she said, adding that sellers are the ones making out big time.
According to a recent market report for Gilbert, the average home with 3 to 4 bedrooms, 2.5 bathrooms, and 1,850 square feet, is selling for $387,000 in about 33 days.
“My father-in-law just sold his home last month and it was sold prior to the open house. Due to the shortage of homes in Gilbert, there was a bit of a bidding war and the house sold for more than the asking price,” said Charlene Wright of Gilbert.
“We sold in August in Gilbert. One day on the market and 10 offers, it was crazy,” said Doug Osborne, who now lives in Colorado.
Investors are getting in on the action, profiting from properties that they have been holding on to in hopes to make a pretty penny.
S. Abdul had an investment property that was 2,025 square feet in Chandler. The property was listed $30,000 over appraisal and comparables in the area. She received three offers, finally receiving a cash offer after three weeks on the market.
Laura Edgar, mortgage advisor at Finance of America in Gilbert, said the Southeast Valley may see this low inventory and strong numbers for many years because more people are relocating there from out of state.
“An interesting perspective is that the first-time home buyer age is 33. Thirty-three years ago, there was a baby boom, and that baby boom lasted for five years,” Edgar said.
“With all the first-time home buyers in the market, coupled with the folks that are relocating here, these two gigantic factors are working against us in terms of having a positive inventory situation,” Edgar said.
Cathy Green, branch manager for the Southeast Valley Russ Lyon Sotheby’s International Realty said COVID-19 has changed course of the market.
“iBuying markets such as Opendoor and Offer pad, completely shut down in the beginning due to the fact that it was not safe having people in their homes and they didn’t really have any way to control the showings like a real estate person did.” Green said.
“It has taken away from some of that market because if an agent puts a property on the market for a consumer, they can normally get them the asking price or possibly more, literally due to the supply and demand problem, which that’s not really conducive to the strategy of the iBuying-type market,” Green said.
According to market data, the total number of homes bought on iBuying market in the Southeast Valley in October was 221 – less than half the 466 that bought a year earlier.
The number of homes sold through the iBuying sites in October totaled 167 – a 68 percent decline from the October 2019 total of 527.
Real estate professionals say a market crash is not in the cards. iBuying companies may struggle and there may be a few foreclosures, they said, but this market is not built on a house of cards as it was in 2007, when the real estate market collapsed.
“There may be some who have to sell after the deferrals end and even some potential foreclosures for people who might be maxed out. But that kind of stuff didn’t really happen like it did during our last crash,” Edgar said.
Back then, she added, “We had so many unregulated shenanigans happening. But now everything is so tightly regulated that is hard to do that. Even with foreclosures, I don’t see banks offering lower prices, I see them asking for market value.”