As 2013 comes to a close, I want to say thank you for always keeping me in mind when it comes to real estate. I especially want to say thank you to all of you who have referred business my way. Helping people is an honor I cherish.
I also want to take this opportunity to wish you and your family the very best of the Holidays and the coming New Year. We certainly live in interesting times. But despite the distractions, headlines and daily nonsense, family and friends will always be the most important focus and blessing we enjoy. The Holidays are a wonderful time to put those blessings center stage and share our appreciation.
As for the real estate market, we continue to see the market changing. As we pointed out last month, consumer confidence has as much to do with how the market will perform as anything. November saw a further slide in consumer confidence causing demand to diminish a bit further.
Some experts would like to say the market has normalized. Supply and demand have balanced for the most part. That is why many are pointing to a “normal” market. However, the market isn’t that simple. While it’s true that inventories are rising and sales are softening, part of that is due to the normal seasonal nature of our market. The rest is consumer confidence.
This “normal” is unlike anything we’ve seen, so it’s difficult for me to call it a normal market. The differences between our current markets, compared to years past, are the other factors outside of supply and demand. We still have interest rates hovering around record lows and demand, while dampened recently, is still pent up. You could say that the “shadow demand” is hovering in the wings far greater than the “shadow inventory” ever actually did.
In a September 25th Forbes Article, Forbes predicted that Arizona will enjoy the fastest job growth in the nation over the next 5 years. Added to that are people who lost their homes who can now re-enter the market and the reason that most of our state moved here, our great weather. Further impacting pent up demand is the fact that new construction, while up recently, is still at a very low pace and it will take years for builders to ramp up again. In Arizona, nearly 13,000 people changed where they call home last month. While that number is definitely down, it is still strong compared to past “slowdowns” and prices are still trending higher.
So, consumer confidence is the only thing holding us back. We have a lot to be thankful for, both personally and looking at the market. The “shadow demand” is definitely real and can return very quickly. We are a resilient people. If you or someone you know is thinking about making a move, I’d love to be able to help. Taking action while others pause definitely has its advantages.