As always, the Newman Realty team hopes this update finds you well. This month we are talking about the summer housing inventory in Gilbert and Queen Creek. Not much has changed and I’ve been saying it is like moving from a 500-degree oven to 495 degrees. There’s a bit of change to inventory but not a lot. It’s still primarily a real estate sellers market with some buyers still able to purchase. For first-time homebuyers, some of them may be locked out of the market, at least for the time being.
Housing Inventory in Gilbert and Queen Creek
The demand for housing in Gilbert and Queen Creek is still outweighing the supply. While we have seen signs of improving balance, probably due to buyer fatigue and price points removing some demand as first-time homebuyers are being priced out of the market, it is still a sellers market.
New Construction Home Sales and Existing Home Sales
Supplies of available housing in Gilbert and Queen Creek remain low primarily due to slow construction cycles as builders compete for limited materials and labor and existing homeowners are concerned about not being able to secure a replacement home after selling. As this market cycle drags on we are starting to see unusual, and somewhat disturbing, signs of changes in approach to transacting home sales.
New Construction Gilbert and Queen Creek
Builders are continuing to drift away from the design center process in favor of building spec homes. They will choose their most popular models and finish selections and build a home on behalf of the public. As construction nears completion the home will be offered for sale at what the builder feels is the current market value.
In today’s market, that is likely a significantly higher price than the home would have sold for pre-construction. This approach heavily favors the builder who does not have to wait on the buyer selection process, buyer concerns about construction status/timelines, and can sell at a higher price.
In the case of Lennar homes, some of their spec homes include “make offer” pricing allowing for a blind auction bidding process. When we recently asked a Lennar new home specialist what “make offer” homes were going for vs. typical Lennar asking prices we were told they could not disclose that information.
Basically, put your best offer forward without any idea if you are above, below, WAY above, or WAY below other interested parties. These changes are good for the builders and hard on the public. Customer service and the value typically applied to interested buyers have been cast out in favor of higher profit margins.
Existing Home Sales Gilbert and Queen Creek
On the resale market, we continue to see struggles on both sides of the transaction.
Buyers are putting in aggressive offers with seller preferred terms and in many cases being outbid by other buyers. We have had buyers submit offers, negotiate up for the seller, only to lose out in the end. In several cases, it is apparent our offer was only being considered/negotiated for leverage to bring up other interested parties’ terms. Buyer fatigue is real in our market and buyers that are relocating and have an immediate need for housing are really feeling the pinch.
Sellers are experiencing concern and anxiety related to accepting any offer for fear there is someone just around the corner that will pay more. Picking the right offer and right buyer is what is most important to the seller but whether that decision was the right one will not be known until the transaction closes.
Buyers and sellers find themselves spending a 30-day escrow wondering if they really made the right decision.
Corporate Real Estate
Let’s not forget our institutional forces at work in our marketplace with their increasingly heavy footprint. Megacorporations like Zillow, Black Rock, Opendoor, Offerpad and a host of others (seems like we see a new one every day) have found housing to be an attractive playground where they can make money incorporate real estate.
Selling to a corporation bent on profitability over a struggling homeowner desperate to find a place to live is creating a moral dilemma for sellers who choose to consider the consequences of their selling choices. Offers from corporate entities are getting more aggressive putting pressure on sellers to go with their terms and the expense of families competing for housing. This can’t be good for any housing market and once again it is the average Joe losing out to corporate interests. Stay tuned for an opinion piece on this as personal experience working with buyers, sellers, corporations and people has led me to have some strong ones.
In summary, I would offer that the housing market in Gilbert and Queen Creek remains strong for sellers and challenging for both buyers and sellers. We are seeing this market serve as an important reminder that Real Estate is not a housing business, it is in fact a people business, and how we treat each other matters. Changes are abundant and now it is more important than ever to have a trusted, experienced advisor on your side when you decide to make a move. We hope you would consider the team at Newman Realty to serve in that role when the time comes.