More Qualified Buyers Expected in 2017
Supply is Down 9.3%, Buyer Demand is Up 4.5%!
Buyers be prepared for another year of increased competition for existing active listings in the Phoenix Metropolitan Area, partly because of over 50,000 more foreclosures due to be removed from credit reports in 2017. That’s in addition to the nearly 50,000 foreclosures that were removed from credit reports in 2016. A foreclosure can suppress a credit score by 100 points in many cases, so their removal is resulting in a higher number of qualified buyers and a 20% increase in the rate of approved mortgage applications over the past 2 years. Increases in buyer activity are expected across all price points under $1,000,000.
It’s starting off very good for existing sellers thus far, as January was the 3rd slowest month for new listings on the market dating back to 2001. This, combined with increases in demand, is resulting in active listings remaining very low when it typically rises in the first quarter just before spring buyer season. New home builders have been creating new supply for buyers, mostly in the $300,000 to $500,000 price range, especially in North Phoenix, South Phoenix, Mesa, Gilbert, Peoria and Buckeye. With the supply and demand imbalance giving sellers a negotiating advantage, it’s reasonable to expect more appraisals coming in lower than negotiated sales price and buyers who are either unwilling or unable to cover the difference.