Welcome to the Scottsdale Vibes Podcast. I’m Alicia Haygood, your host. Every week, I have the pleasure of bringing you fresh and captivating episodes highlighting the people, places, and events of Scottsdale. And before we dive into today’s episode, let’s take a moment to acknowledge one of our sponsors, the Shackleton Group, led by the incredible Shawn Shackleton.
Just before we started recording today, Shawn and I were discussing the unpredictability of the real estate market. We both chuckled at the thought of trying to make accurate predictions in such a dynamic environment. It’s simply impossible. While we can analyze data and trends, the market has a mind of its own. At the moment, low inventory and higher prices seem to be the prevailing factors. I’ve heard stories from friends who are dealing with multiple offers and bargaining situations, which is quite unusual for this time of year in Scottsdale.
Naturally, I was curious to understand what’s driving these changes, as it deviates from the typical pattern we observe. Shawn shed some light on the matter, emphasizing that the past two years have been far from normal. We’ve experienced historically low interest rates, low inventory, and soaring prices. Then, everything suddenly shifted after May last year, catching many off guard. The market didn’t necessarily crash, but it underwent a rapid transformation that triggered memories of the 2008 financial crisis.
It’s understandable why that event left a lasting impact on people’s minds. Even though it occurred some time ago, it still feels relatively recent. However, we must recognize that the situation has changed again. Prices have been steadily climbing since December, and the median price point reached $415,000 in January, February, and March. As we enter April, we’ve already surpassed $420,000, indicating an upward trend that some may find hard to believe or accept.
Furthermore, the issue of low inventory persists. There are more homes leaving the market than entering it, creating an inventory deficit. This demand, coupled with fluctuating interest rates, affects market dynamics. We were fortunate to enjoy historically low rates, but they have recently risen, albeit with some fluctuation. It’s crucial to stay informed about interest rates as they significantly impact market activity.
During our conversation, Shawn shared a valuable anecdote about a client who received a counteroffer on a house. The counteroffer initially caused concern due to the price, but Shawn advised her to take a step back and consider the bigger picture. By evaluating the monthly payment rather than the loan amount, they could make a more informed decision. It’s essential to work with a knowledgeable realtor who can guide you through these intricacies and help you weigh the pros and cons of different scenarios.
Traditionally, the Scottsdale market experiences a slowdown during the summer months. As the weather gets hotter, people tend to travel or retreat to their second homes, resulting in decreased activity. However, the advent of the internet has transformed the buying process, making it possible to purchase properties remotely. Even before COVID-19, Shawn was witnessing clients buying homes via FaceTime. The pandemic further accelerated this trend, and she was astonished by the number of homes sold without buyers ever stepping foot inside.
Returning to the current state of affairs, Scottsdale’s steady growth can be attributed to job opportunities. Unlike before the 2008 crisis, the city now boasts a more diverse range of industries. Previously, construction, hospitality, and low-end call centers dominated the job market. However, the crash severely affected these sectors, and it took time for them to recover. Additionally, the pandemic and supply chain disruptions further delayed construction projects, leading to a shortage of homes nationwide.
It’s essential to grasp the magnitude of this shortage. The lack of available homes isn’t exclusive to Scottsdale; it’s a nationwide issue. Cities across the country are experiencing similar challenges, as the demand for housing surpasses the current supply. Factors such as population growth, limited land availability, and regulatory constraints contribute to the housing shortage we face today.
In response to this situation, developers and builders are working tirelessly to construct new housing units. However, it’s a complex process that requires time and resources. The construction industry is facing its own set of obstacles, including rising material costs, labor shortages, and supply chain disruptions. These factors can delay projects and further exacerbate the housing shortage.
To address this issue, it’s crucial for local governments to adopt policies that promote affordable housing and streamline the construction process. Encouraging mixed-use developments, implementing zoning reforms, and providing incentives for affordable housing projects are just a few strategies that can help alleviate the shortage in the long run.
As potential homebuyers or renters, it’s important to stay informed and be proactive in your housing search. Working with a knowledgeable real estate agent can greatly assist in navigating the current market conditions. Exploring different neighborhoods and considering alternative housing options such as townhomes or condominiums may also broaden your possibilities.
While the current housing market may present challenges, it’s important to remain hopeful. Real estate markets are cyclical, and as supply and demand dynamics continue to evolve, we may see a shift in the future. In the meantime, it’s crucial to stay informed, be patient, and make well-informed decisions based on your individual circumstances.
That wraps up today’s episode of the Scottsdale Vibes Podcast. I hope you found this discussion on the housing market insightful. Remember to call Shawn Shackelton from The Shackelton Group for all of your housing needs!