The weather has been about as unpredictable as the real estate market this year, with both giving us more of the same when we expected to be cooling off by now.
Seasonality means about as much to a cactus-themed Thanksgiving table as it does to the Arizona real estate market amid historically low interest rates and inventory rates in 2020.
We kicked off the month with just 8,682 available listings – down just over 40 percent from last year – and while that number is up 4.5 percent over last month, the likelihood that a Gilbert buyer actively looking for a home in the area was able to feel that increase is nearly impossible.
With listings under contract up nearly 33 percent year over year – but again down .9 percent from last month – Gilbert sellers continued to see multiple offers at most price points, days on market less than a week and a new set of challenges in negotiations as buyers eager to have the winning bid feel pains of remorse during their inspection period when faced with deferred maintenance that sellers don’t want to address.
Never before have emotions run so high when a market has been so good.
Sometimes just getting the house IS getting the deal and sometimes negotiating an extra concession or two as a seller allows you to close the deal in time to make up your profit on your next purchase.
Refraining from political discussion without ignoring the elephant in the room - the real estate transaction will always take reaching across the aisle and working together. But 2020 has put a magnifying glass on the decisions that buyers and sellers have to make about how best to do that.
Hit the hardest at the onset of COVID, the luxury market is back with a vengeance with 37 closed homes over $3 million in October - the highest number in recorded Arizona history.
The low end of the market continues to be somewhat of an apparition, with a faint presence dominated by hungry first-time home buyers, individual and bulk-buying investors and the sheer lack of inventory.
That’s especially true in Gilbert, where the average monthly sales price hit $464,564 as compared to $387,784 just a year ago.
It’s not a surprise that experts are challenging CoreLogic’s modest price increase predictions, especially here in the Valley.
Gilbert currently sits in second place out of the 17 major metropolitan cities in Arizona as having the greatest gap between a deficient supply in inventory and a surplus of buyer demand.
While not ranked on the list of permit-pulling new construction communities as much of the building was locked and loaded going into 2020, builders in Gilbert from Waterston by Maracay to McQueen Landing by Lennar are burning the midnight oil trying to complete homes for prospective Gilbert residents who are hoping to have a new home for the holidays.
Closings usually pulled into years’ end are being pushed into the first quarter of next year because of everything from cabinet delays, lumber price increases, appliance manufacturing and labor shortages to the sheer volume of new construction,
Then there are resale and refinance transactions being pushed through the lending, title and county pipeline.
Every home-related product and worker from furniture to handymen is impacted.
So, why brave the storm? Why not just sit back and relax, wait until this is “over”? Why not let buyers fall over each other for homes that need new roofs and wait until prices fall?
You may ask, why not hang on to your house and try to time the market? If we have this many buyers now, imagine what we’ll have when COVID is “gone”?
Well, my friends, let me be as factual as we can be amidst a global pandemic that has challenged every norm we have from walking around the mall with a coffee to editing common sayings like “put our heads together” or “we’ll hold your hand every step of the way” in light of social distance guidelines: there is no indication that this will be “over.”
In the meantime, renters are having the rug pulled out from underneath them as landlords are eager to sell the home that just last year they intended to keep forever.
In the meantime, buyers are watching their buying power slip away as home prices increase 15-20 percent annually and sellers are left wondering why even in the hottest market their home that has not been well maintained still isn’t selling.
We are buying, selling and moving for different reasons now – to be closer to family to help with home schooling, to get more space to accommodate two home offices, to have a pool and landscaped backyard with public recreation activities suspended, to ensure we have a place to call home because each month we pay ourselves back through our mortgage instead of paying someone else’s with our rent check.
And in the meantime, the opportunity to buy an interest rate under 3 percent, purchase a brand-new home that has the potential to close under market value and the ability to get all of your asks met upon selling – including lease backs, appraisal waivers and maybe getting your dog washed as part of the deal – may never happen again.
Gilbert, there are still people struggling.
Local businesses need our support. Political opponents need healing and unification. The real estate market is our foundation to stand on. United we stand on the beauty of our community and the opportunity it affords us. Remember our mission, Gilbert: to anticipate (the needs of others and ourselves), create (the solutions to the problems we have and the space to solve the ones we don’t understand) and help people (we know, we just met, and we’ve loved for a life time).
We’ve got the real estate market and pumpkin spice on our side.
We can do this.