Closed single-family home sales in Fountain Hills were down by 25% since last March according to data from Phoenix REALTORS, a real estate membership organization that provides housing statistics for …
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Closed single-family home sales in Fountain Hills were down by 25% since last March according to data from Phoenix REALTORS, a real estate membership organization that provides housing statistics for towns and cities throughout the Valley.
In the same period, home listings and home inventory in Fountain Hills were both up by approximately 50%, suggesting an imbalance in the housing market.
Sheryl Bowden, president of Phoenix REALTORS, believes rising prices and interest rates are keeping buyers at bay despite plenty of housing supply.
“With interest rates playing the games that they’re playing right now, a lot of buyers are just set back, trying to figure out if they can buy,” says Bowden. “A buyer that can qualify for a $500,000 house at five percent can now only qualify for like a $325,000 at seven percent. They’re sitting in a whole different price bracket.”
The current 30-year fixed mortgage rate recently jumped past seven percent according to data compiled by mortgage giant Freddie Mac. That’s compared to last year’s 6.35%.
And while the Federal Reserve doesn’t set mortgage rates outright, the Fed’s recent decision to dial back expectations on reducing the benchmark interest rate can make borrowing more expensive for homebuyers across the country.
Growing inventory of homes in Fountain Hills
Over the last year, housing inventory in Fountain Hills has crept up 53.1% with just over five months’ supply of inventory.
“That just means if another house didn’t go on the market for the rest of the year, then Fountain Hills would be completely sold out of houses in five months,” Bowden said.
Despite the increase in housing inventory in a single year, five-to-six-month supply of homes is considered a balanced market according to Bowden, making it fair to both buyers and sellers.
Louis A. McCall II, chief operating officer of MCO Realty in Fountain Hills, says the balance between sellers who have witnessed steady increments of property valuation and buyers who have access to “an exclusive enclave boasting a finite amount of homesites,” creates a harmonious blend for sustained appreciation over time.
“Fountain Hills continues to epitomize the enduring appeal of real estate investment, offering a gateway to both financial growth and community stability,” McCall said. “This is why we believe the future of Fountain Hills is bright despite the current interest rate market.”
Home prices tick-up
A growing supply of available homes for sale coupled with steadily rising mortgage rates typically signal lower home prices in the U.S. housing market, but rising inflation, the cost of building and construction materials, labor and several other factors can keep housing prices from falling.
In Fountain Hills, the median sale price of a home increased 24.7% since last March to $945,000.
Inflation as measured by the Consumer Price Index (CPI) rose by 3.5% before seasonal adjustments from March 2023 to March 2024 according to data from the Bureau of Labor Statistics.
Bowden says rising inflation is a major reason why the Fed is not reducing the benchmark interest rates.
Sheryl Bowden is the president of Phoenix REALTORS. (Submitted photo)
Shifting priorities
In the current housing market conditions, Bowden is aware of instances where parents have decided to repurpose their inheritance money as a down payment for a child’s home.
“Parents want to get their kids into a home,” Bowden said. “So, you’re seeing more parents stepping up and helping out.”
As potential home buyers and sellers adjust their expectations in the housing market, Bowden is optimistic as April tends to be a prime month for home sales.
“I’m an eternal optimist,” Bowden said. “I think everything always works out the way it’s supposed to work out.”
Offering advice for buyers, Bowden says being patient, acting quickly and making sure they are fully-qualified are key in this housing market.
For sellers, Bowden says to ensure their properties show well and to prepare their buyers for seller concessions.
“Set up your buyers so they can see the inventory that’s hitting the market so they can act swiftly,” Bowden said.
We invite our readers to submit their civil comments on this issue. Email AZOpinions@iniusa.org. Cyrus Guccione can be reached at cguccione@iniusa.o
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