Here’s what you need to know about iBuyers in our Phoenix market.

If you’ve been paying attention to the Phoenix real estate market, you may have noticed a surge in iBuyers. Why is that? Today, I want to answer that question and explain the iBuyer situation in our current market. 

So why are hedge funds investing in real estate in the first place? Conventional wisdom says they put their excess money into stocks, but that changed when the market crashed in 2008 and 2009. Companies were sitting on huge piles of cash, and real estate was so cheap, it was too good of a deal to pass up. Since then, companies have realized the power of investing in real estate. We’ve seen nothing but appreciation since the crash in 2008, so their investments have paid off so far; why would they stop now? 

This is contributing to a supply-side issue in our market that is also related to the 2008 crash. When everything crashed, builders were left in a tough position since ...

Here’s why things in our market seem to be getting back to normal.

It seems like things are slowly beginning to get back to normal, both in day-to-day lives and in our real estate market. Here are the three reasons why the blazing-hot market is starting to cool off slightly:

1. Fewer multiple-offer situations: Since March, there’s been a decline in the number of bidding wars on homes. This doesn’t mean they’re gone entirely, but they’re certainly not as rampant as they were six months ago.
2. More listings: In July alone, we saw more listings come onto the market than we did over the previous 10 months. This means buyers have enjoyed more options to choose from when looking for a home.

"I believe a lot of these changes have to do with buyer fatigue."

 
3. Homes aren’t selling as quickly: Listings are staying on the market for a slightly longer amount of time before they’re sold. Again, this allows buyers to have more optio ...

What you need to know about the primary residence principal exemption.

You can potentially make up to $500,000 and not have to pay a single tax on it. This is called a primary residence principal exemption, and it states that if you decide to sell your home and you’ve lived in it for two out of the last five years, the money you make from that sale would not be taxed. A married couple wouldn’t have to pay any taxes on the gain from up to a $500,000 taxable event, and it’s $250,000 if you’re filing as a single person. This is a unique exemption that I’ve used myself, and I’ve seen clients use it to help them move to a more expensive property. 
The primary residence principal exemption isn’t a one-time exemption either, you can use it as many times as you want. Especially with how much equity people have gained in our real estate market over the last couple of years, they may be worried about how much they’d have to pay back in t ...

Why have home prices grown so rapidly across the nation?

It’s very easy to attribute rising home prices to the influx of buyers in the market looking for homes right now. Of course, there has been an above-average level of demand, but that’s not necessarily the reason home prices have grown so rapidly.
The first real issue has to do with the supply of homes. As I’ve mentioned before, we’re currently experiencing a record-low amount of inventory. To give you some perspective: We would need almost 24,000 active listings to hit the market just to create some semblance of a normal market, which would be a 700% increase from where we currently are. At the moment, sellers are in charge, but we’re starting to see a little bit of fatigue; in some segments of our market, demand has been lower than it has in years.
                                          ...

Sellers in this market are running into problems and we’re solving them.

So much has been said about this low-inventory market. Combined with fears from the pandemic, a lot of people are staying put in their homes right now. If you’re in a situation where you don’t love where you live, I want to talk about some options that our sellers are successfully utilizing in today’s market to win as buyers, too:
                                                                             "A lot of buyers are open to the idea of a leaseback in this market."
1. Do a leaseback. Buyers are making extraordinary sacrifices to secure homes these days. One of those sacrifices is a leaseback, which allows you to stay in your home for a period of time after it has sold to give you ti ...