no hassle listing blog

The Phoenix real estate market is always in flux, but currently in a way that effectively changes nothing.  How is that possible?  The answer lies in the seesaw balance of supply and demand– only in this case each side is changing in a way that offsets the other.  Supply – it’s up.  Demand – it’s up.  The result is a static balance.  Leaving us with a market that continues to slightly favor buyers in most areas (strongly in the outlying areas) just as it has since November of 2024.

The brightest spot in the market (as has been true for the last few years) is the luxury market.  It is performing better than ever courtesy of the stock market.  Conversely, the darkest spot is condos under 300K.  To quote the Cromford Report: “Sellers have the least advantage in the condominium market under $300K as supply is up 20% over last year and contracts in escrow up only 13%. April sold prices are down 9.5% from last year in this segment with the median size sold at 1,048 sq. ft., historically prices for this segment are similar to where they were 5 years ago around May 2021.” By contrast, “Single family homes between 1,200-2,400 sq. ft. have shown the most stability in prices over the past 3 years with minimal fluctuation.” The upshot is sellers tend to have the advantage in central locations and luxury, while buyers control the outer areas and prices below $500,000.

Where this market heads next depends largely on the economic concerns of inflation, war, and jobs.

Now on to some common topics that prompt questions from our clients.

Solar:  Our feelings on solar can probably be summed up with “love the idea, hate the reality”.  Particularly solar leases.  Again, we stress that the concept is solid in an area that is in “the sunbelt”.  However, few consumers are aware that the Big Beautiful Bill removed the existing tax incentives for the consumer on solar.  Even beyond that, leased solar creates a financial obligation for any future buyer to assume.  Many buyers are pushing the ceiling of their monthly qualifications.  Another fixed payment that they must take on can be met with lender restrictions as well as buyer’s mental hurdle – they may feel why do I have to take on your debt? It can dissuade some buyers from picking a solar lease home. Additionally, when roofs need repair or replacement the panels must be removed and reinstalled by the solar company at considerable expense.  Owned solar is generally viewed differently by buyers- some consider it a plus although they may not consider it a value added item (i.e. they may not pay more for it, but they may consider it a plus when choosing a home).  In short, we strongly urge our clients to really research solar and its implications over the sales pitches before committing.

Prepping your home for sale: We’ve been selling real estate for over 40 years and this question’s answer never changes.  Small changes can provide good payback – with the ultimate goal of creating a good first impression.  Landscape maintenance is one of the first things a buyer sees when approaching a home.  A well-groomed yard along with a welcoming front door matters.  As for the interior, purging and removing clutter costs nothing but pays off in making the space look larger, aesthetically pleasing and well maintained.  Interior paint and updated flooring also payoff with buyers.  Sound expensive and overwhelming?  Can you sell just it as-is? Of course, but as we like to say buyers are bad estimators.  There is penalty pricing for pushing work on to them.  But getting the home on the market always outperforms our next topic….

Cash offer/investor– Home sellers find the idea of a cash offer enticing.  After all, the cash offer promises a few coveted things: skipping the work to prepare your home for sale; no appraisal or buyer qualifying for a loan; and no showings!  Sounds great on paper.  What is missing is… money.  The average home seller will give up around 25-30% of their home’s hard earned equity when selling this way.  While we do out of necessity offer our clients a cash offer option thru the largest cash offer firm, we encourage them to consider enduring the traditional sales process to maximize value.  Because in addition to losing money you give up representation.  That may feel not meaningful but representation is a combination of hand holding blended with advocating.  Meaning that you have someone defending your pocketbook but also who can level the playing field of knowledge.  Going it alone puts you at a disadvantage as the investor is not on your side.  In fact, legislation was passed to force investors to disclose if they are “wholesalers” because the public was so often exploited.  What is a wholesaler?  It is an investor who agrees to buy your home and then while under contract sells the home to another investor for more.  We have seen deals 5 investor deep – with each person making money on the home seller’s desperation or ignorance.  Example:  home seller sells to investor A for 400K, investor B agrees to take investor A position for 460K, investor C agrees to take investor B position for 500K… and so on. All money that the homeowner would have captured simply by agreeing to sell thru a traditional sale process.  Seniors are often the target for these investors.  The message?  Check out all your options before heading down this precarious pathway.

Didn’t see your question addressed here?  Contact us – we will happily answer your questions or tour your home at no cost or obligation.  As always, we are here to help.

Russell & Wendy

(mostly Wendy) 

The Seesaw Market

The Phoenix real estate market is always in flux, but currently in a way that effectively changes nothing.  How is that possible?  The answer lies in the seesaw balance of supply and demand– only in this case each side’s changes offset the other.  Supply – it’s up.  Demand – it’s up.  The result is a static balance.  Leaving us a market that continues to slightly favor buyers in most areas (strongly in the outlying areas) just as it has since November of 2024.

The brightest spot in the market (as has been true for the last 3 years) is the luxury market.  It is performing better than ever courtesy of the stock market.  Conversely, the darkest spot is condos under 300K.  To quote the Cromford Report: “Sellers have the least advantage in the condominium market under $300K as supply is up 20% over last year and contracts in escrow up only 13%. April sold prices are down 9.5% from last year in this segment with the median size sold at 1,048 sq ft, historically prices for this segment are similar to where they were 5 years ago around May 2021.” By contrast, “Single family homes between 1,200-2,400 sq ft have shown the most stability in prices over the past 3 years with minimal fluctuation.”

Where this market heads next depends largely on the economic concerns of inflation, war, and jobs. Whatever the market brings, we will report on as it unfolds. 

Russell & Wendy Shaw

(mostly Wendy)

War and Real Estate

Our real estate market has been showing signs of life.  Demand (contracts in escrow) are up 10.2% over last year (as well as 2023 & 2024).  Although demand is still 13% below normal, improvement is well… improvement.  The steadily increasing supply that was tipping the market in favor of buyers has finally leveled off.  New listings coming to market in February and March are down 7%.  This effectively has begun to shift the buyer’s market closer to a balanced one.

The fly in the ointment?  War. 

The Cromford Report shares this: “While buyer demand for homes has been recovering, the recent war with Iran that started on February 28th has created some speed bumps along the way. Hopes are high that the effects are temporary, but the rising cost of gas threatens to affect the current rate of inflation in the United States. Mortgage rates do not like inflation, and in response they have risen from 5.99% to as high as 6.4% as of this writing. This increase in mortgage rate gives buyers two choices, to accept a 5% increase in payment, or a 5% drop in purchasing power.” Of course, the unstated third choice is for buyers to go to the sidelines and wait until the war ends. 

So far, the most immediate impact seems to be higher interest rates.  Rising inflation generally causes mortgage rates to increase because lenders require higher returns to offset the reduced purchasing power of future loan repayments. Which of the three choices buyers are choosing will show up in the next month.  Whatever the impact, we will be tracking the market and reporting our findings. To further quote the Cromford Report: “The message for sellers continues to be patience. The housing market is in recovery, but it’s a slow one.”

Russell & Wendy Shaw

(Mostly Wendy)

The spring buying season has begun. January brings the highest levels of luxury and retirement listings to market, while March brings the highest level of mainstream sellers.  Encouraging news is that while demand is 16% below normal, it has improved since last September where demand was 24% below normal.  Also improved are the number of properties under contract – 7% higher than this time last year.  So while the market for the average seller is not as robust or as easy as hoped, it still is improved even if only mildly so.  As to supply, after years of below normal ranges it currently is back to normal levels.  This seesaw of supply and demand leaves the overall the valley in a gentle buyer’s market. But, as usual there are geographic submarkets performing differently.  The Cromford Report shares a closer look:

Total inventory in the Arizona Regional MLS is up 9% over last year and combined with lower demand places the Valley in a slight buyer’s market overall, with large central cities in modest seller’s markets and growing cities on the outskirts in prolonged buyer’s markets.

 Not all cities are below normal in demand. In fact, Apache Junction is 23% above normal for demand and normal for supply, ranking the city as the 4th strongest seller’s market for now. Many growing cities in buyer’s markets have normal levels of demand, but high supply. These cities include Buckeye, Gold Canyon, Goodyear, San Tan Valley, and Surprise, where annual sales have increased quickly over the past year as a growing number of buyers have taken advantage of attractive seller and builder incentives. Developers have responded by scaling back the number of permits to avoid prolonging the oversupply situation and encourage a more balanced market.

Advice to buyers:  it is a good time to buy.  You have more choices combined with lower interest rates and lower pricing than in the past. 

Advice to sellers:  What was true last year is true this year – the properly priced and well maintained homes will sell with good marketing.

As always, we are here to answer specifics for your situation.  No strings attached.

Russell & Wendy Shaw

(mostly Wendy)

Market Trends

Market Trends

With the year so newly begun, emerging trends are just trickling in.  At the moment, we have to look back to look forward.  Let’s begin with some interesting trends 2025 established according to the Cromford Report:

Condo/apt style vs single family

“First we note that apartment-style homes sold in lower volumes. A drop of 12% compared with the year before, whereas single-family detached homes sold 5% more. This is an unusually strong swing away from a specific dwelling type”.

There are likely reasons that the market has shifted away from apartment style properties.  First when supply rises, buyers given a choice will typically pick single family (privacy and space being prioritized) over multifamily.  Second, financing is typically more limited (FHA/VA do not lend on many complexes) and lenders often require larger down payments (often 20%).  Third, insurance is increasingly becoming more difficult and expensive to obtain in large complexes and building standards are being scrutinized. Some lenders will not accept the level of insurance that the HOA has obtained.  Fourth, while sales prices are typically lower for condos and townhomes, the monthly payment can be higher giving the insurance, HOA fees, assessments etc. All of these limit the pool of buyers.

Foreclosures

“Secondly, there has been a major rise in completed foreclosures, almost doubling compared with the year before. Those of an alarmist persuasion could focus on this fact, but the volumes are still tiny and not even back to what we would consider normal yet. They are heading in that direction though.”

Is this a point of concern?  Not really, at least not at this time.  As the Report points out the volumes are still small and below normal.  That they would grow is predictable – mainly due to pricing not increasing.  When sellers have no equity – they are more likely to foreclose as they cannot sell without paying to sell.  Rising prices cover a multitude of sins, and sellers that experience a setback or adversity have the equity that makes selling possible and preferable to foreclosing.

Resale homes vs new build

“Thirdly, we see a swing in favor of re-sales and away from new homes. New homes went down 9% while re-sales rose 2%.” This is a notable reversal since new homes in 2024 were about a quarter of the market.  We can only speculate as to why this shift has happened.  Resales tend to favor the inner urban areas, while new builds have to go where there is available raw land in outer city areas.  Also the cost of commodities and land have risen leading to increased cost of new builds – allowing resales to better compete on price.

Interest rates

Interest rates have a strong impact on sub-luxury market demand.  But for an insightful look at them, the Cromford Report shares this:

“The market is not very different from this time last year overall, especially with regard to prices. But mortgage interest rates have come down a lot. The typical 30-year fixed mortgage is at 6.19%, down from 7.06% a year ago, which is a drop of 87 basis points and a percentage drop of 12.3%. Those who focus on interest rates as a driver of the real estate market will have to explain why we seeing only a small change in market conditions after a large change in interest rates….

Of course, there are many more factors driving demand than just interest rates, but the other factors are far more difficult to measure, so economists tend to vastly exaggerate the impact of interest rates. Other factors which could possibly be influencing buyers include: homes becoming cheaper in real terms (after adjusting for inflation) is a situation that motivates some buyers to wait and see if they get cheaper still; mortgage rates going down can also lead potential buyers to wait and see if they get cheaper still; current talk by industry leaders about AI eliminating large numbers of jobs, despite studies showing widespread lack of actual productivity gains from businesses implementing AI, can make some buyers nervous about the security of their employment. Buying a house in this situation can seem risky compared with the option of renting, as the cost of changing your mind a year or two later is much higher than terminating a lease.

In summary, the market is looking stronger than last year in many respects, but not as much as we would have expected given the state of the mortgage market.”

Pricing

As so often happens, pricing doesn’t move in tandem across all price points.  The luxury market has benefited from the stock market and crypto gains funding gains in the luxury housing market.  The sub luxury market has not seen the same benefits. As the Cromford Report shares:

“While sales are expected to increase, prices are not. Price is the last measure to move when a market shifts, and it can take up to 3-6 months to emerge. Price appreciation remains stagnant in the middle price ranges, rising in upper ranges, and declining under $400K. Greater Phoenix is pulling out of a buyer’s market and edging towards a balanced state, but a seller’s market isn’t on the horizon.”

Summary

At the moment, we see the market moving towards balance.  But as explained above, many trends take time to establish.  As the evidence continues to mount as to the market direction, as always we will keep you apprised here first.

Russell & Wendy Shaw

(Mostly Wendy)

2026 Begins

With the year so newly begun, we have scant evidence to confirm this year’s emerging trends.  But it can be useful to compare today with a year ago.   New listings are coming in more slowly; the Cromford Report shows them arriving at a rate 2.5% lower than last year.  But to put this in perspective, it still is a better rate than 2020-2024 which had the lowest counts in 25 years for January new listings.  As usual, the devil is in the details.  It is actually one price segment – listings under 300K – that are seeing a significant increase, amounting to 15% over last year.  The listings are primarily condos and mobile homes in Phoenix and Mesa combined with single family homes in Pinal county.  The increased supply has pushed sales prices down 2-3% from last year and they are still continuing to decline. All other listing counts are in line with last year or weaker which is bringing the rest of the market close to balance between supply and demand.

What bodes well for first quarter sales is interest rates.  Most of 2025 saw rates in the high 6% to low 7% range – while currently rates are in the high 5% to low 6% range.  That means the same priced home has a payment of 10-12% lower.  For the sub-luxury market this is critical.  How will that impact pricing?  We turn again to the Cromford Report:

While sales are expected to increase, prices are not. Price is the last measure to move when a market shifts, and it can take up to 3-6 months to emerge. Price appreciation remains stagnant in the middle price ranges, rising in upper ranges, and declining under $400K. Greater Phoenix is pulling out of a buyer’s market and edging towards a balanced state, but a seller’s market isn’t on the horizon.

As the evidence continues to mount as to the market direction, as always we will keep you apprised here first. 

Russell & Wendy Shaw

(Mostly Wendy)

Incremental Improvements

2025 was neither a record-breaking year nor one so dismal that it was headline grabbing.  Instead, it was an incremental market with signs of small steady improvement. As this year winds to an end, demand has slowly been creeping up, and with it optimism for the coming year.  The Cromford Report shares these facts:

“… this year November closed an extra 23 sales per day, putting the improvement at 9% (over Nov 2024) So far December is also outpacing last year with an extra 14 closings per day on average. If this is a peek into what 2026 may bring, then sellers should be optimistic for contract activity in January.

…Recent improvements in demand combined with declines in supply are pushing the Cromford Market Index back in the direction towards a balanced state. While Greater Phoenix is still in a buyer’s market overall, central and established cities are becoming the first to move back into seller’s markets. Most recently, Phoenix, Mesa and Tempe shifted back into seller’s markets within the last 30 days, putting nearly all cities in the Northeast and Southeast Valley in seller’s markets, with the exception of buyer’s markets Queen Creek and Sun Lakes. Developing cities on the edges of Metro Phoenix are typically the last ones to pull out of a buyer’s market. Pinal County cities, for example, are buyer’s markets except for Apache Junction, which is a seller’s market. The West Valley is a mix as El Mirage is a small seller’s market and Peoria recently shifted into a balanced market, joining Glendale, Avondale and Laveen. All other West Valley cities are buyer’s markets.

Don’t expect much upward pressure on price in the short term, even if your city has shifted back into a seller’s market. Prices can take up to 6 months to show a response to a shift, which means the seller’s market must be maintained, and many of these cities are still quite weak. What sellers can expect is more showing activity, shorter days on market, and less pressure to reduce their price once the Spring buying season begins.”

Whatever 2026 brings, we will endeavor as always to keep you informed.  From our family to yours, we wish you the happiest of holiday seasons.

Russell & Wendy Shaw

(Mostly Wendy)

The 4^th quarter in real estate rarely is one to talk about.  Demand is highest in the spring thru mid-summer and then progressively declines in the 3^rd and 4^th quarter.  This year is no exception but comparatively, according to the Cromford Report, we are in the midst of the best 4^th quarter for the Greater Phoenix market in 3 years. Admittedly the last 3 years have had anemic demand.  The market has taken time to absorb the extreme shift in rates in 2022 where the typical 30-year mortgage interest rates moved from 3.9% in February to over 7% in October. But demand is slowly adapting to the new normal.  To quote the Cromford Report:

“It took a while for the buyers to mobilize, but better late than never. So far, this is the best 4th quarter Greater Phoenix has seen in 3 years for contract activity. Listings under contract are up 15% over last year with notable improvements in the market under $300K and the market over $1M. The government shutdown didn’t help closings for FHA and VA transactions, especially between $300K-$600K, but October saw a 3.3% increase in sales regardless, and closings delayed will add to the November sales counts…

In the meantime, stock market performance, corporate profits, and cryptocurrency have performed well enough to boost the luxury market in Q4. Contracts in escrow between $1M-$2M are up 25% over the past 5 weeks, and up 16% over last year. Contracts in escrow over $2M have risen 25% over the past 9 weeks putting them up 7% over last year. It hasn’t been enough to boost contracts in retirement communities much, but Sun City, Sun City West, and Sun Lakes are not doing worse than last year.

Contract activity typically drops after the Thanksgiving holiday until the new year begins. This sparks a wave of price reductions just before Thanksgiving followed by just a trickle of reductions in December. January is the most popular month for new listings to hit the market, so properties that don’t sell between now and December should expect another wave of price reductions in the first few weeks of January.

Overall, while demand is slowly improving, supply is still on the rise and keeping most cities in a balanced or buyer’s market. Prices are still under pressure and buyers are looking for the best value for their budget”

Russell & Wendy Shaw

(mostly Wendy)

Sheaborhood Holiday Lights & Bike Tour 2025

As the Year Comes to a Close

As we close out the year in real estate – the numbers are much like where we began, albeit with minor variances. For those who prefer that we not bury the lead – the Greater Phoenix market ends the year predominately a buyer’s market.  But as usual, the devil is in the details.

The Cromford Report shares this: “While Greater Phoenix remains in a buyer’s market overall, the Northeast Valley including Fountain Hills, Paradise Valley, and Scottsdale are top seller’s markets, reflecting a drop in supply and sustained demand in these cities. Also seller’s markets: Anthem, El Mirage, Avondale, Chandler, Gilbert, Apache Junction, and Sun Lakes. Balanced markets include Phoenix, Glendale, Sun City West, Tolleson, Mesa, and Tempe. Buyer’s markets are mostly on the edges and outskirts where there is more new home development. They include Peoria (barely), Sun City, Surprise, Goodyear, Litchfield Park, Laveen, Buckeye, Gold Canyon, San Tan Valley, Queen Creek, Maricopa, Arizona City, and Casa Grande.”

But sub-markets are not just geographic in nature, they also segment by price.  The luxury market and the sub-luxury market often to do not move in tandem.  This was certainly the case this year when we saw the luxury market over-perform while the sub-luxury continued you to struggle.  It’s not shocking given that the health of the luxury market typically relies on the strength of the stock market and crypto, while the average homebuyer market relies on mortgage rates.

 Demand

Weaker than normal demand (20% below normal) is not consuming the current supply – hence a market that favors buyers.  While the stock market and interest rates are primary drivers of demand, other factors are at play as well. Employment/income levels, consumer sentiment, inflation, net migration, household changes, and prices all play a role. As the Cromford Report points out: “It is harder to predict demand as it tends to be driven by a lot of different factors, some of which are emotional rather than financial. At the moment overall demand is about 20% below normal but it could easily move in either direction from here.” The point is well taken – demand is elastic and can rapidly improve or worsen depending on the multitude of factors at play. If mortgage rates for instance plunged, demand would spike in the sub-luxury market.  But the effect can be unevenly distributed as the Report documents a September example: “Lower mortgage rates and lower prices have stimulated demand in unexpected places. While homebuyer demand between $300K-$500K has been anemic, homes between $500K-$1.5M saw a boost of sales in September, up 19% year-over-year, which increased the market share from 36% to 38% of sales, and increased both the median price and average price per square foot measures for the Valley. The reason could be linked to jumbo mortgage rates dropping below 30-year conventional rates for the first time in 2 years, but also the popularity among high-wage buyers of adjustable-rate mortgages, which are currently averaging 5.8%.”

Supply

As we compare the see-saw of supply and demand, one of the two usually dominates.  Currently, supply is the dominant factor and it is moving higher.  Unlike demand, supply is much slower moving and less elastic.  As of this writing, the increase in new listings has surpassed month over month for the last 2 years– with the only exception being August. The typical seasonal pattern is that supply tends to build until mid-November and then declines as we approach the end of the year.  Sellers then enter (or re-enter) the marketplace in larger numbers January thru March.  As the Cromford Report shared new supply of listings in one week rose 1.85% in a 7-day period and now active listings exceed 25,000. While this may not sound like too many homes for a metro of our size, with demand 20% below normal this amount of supply swings the market in favor of buyers.  The Report further explains:

“Across most market segments, sellers would be in a much better place if they had fewer competitors. At the low-end of the market, supply significantly exceeds demand and this suggests that first-time buyers are thin on the ground. Those that are still in the market are well positioned as far as negotiation is concerned, but as they are probably inexperienced, they could do with a lot of support from a buyer’s agent who understands how the land lies. At the top of the market, demand remains much stronger, thanks to profits in stocks, cryptocurrency, precious metals and other financial assets. Some who have been fortunate in these markets are diversifying into high-end real estate as a hedge against any sudden weakness developing in those financial areas. If this weakness actually occurs, we should expect a swift drop in luxury home demand and a corresponding increase in supply.”

Price

“We are currently reporting positive appreciation for the overall market, but without the luxury market, that appreciation turns negative.”

The luxury market performance when combined with the rest of the marketplace can hide a multitude of sins.  That’s because luxury’s large numbers have an outsized effect on averages. This is why examining both the location and price points of the marketplace is the only way to accurately evaluate the housing market. 

Let’s not trade accuracy for simplicity. If you are wondering about your specific area or property- let us do the research.  Put our years to work for you at no obligation.

And our closing thought – we wish you and your family a wonderful Holiday Season.  We are so grateful for the honor of serving you.

 Russell & Wendy Shaw

(mostly Wendy)