A new report says that the Valley’s housing market is changing.
The Wilcox Report on real estate said fewer people are paying cash to buy a home in the Phoenix area. According to the report, the percentage of cash sales of resale homes in the Valley dropped from 50 percent to 20 percent in the last year.
The report’s author, Fletcher Wilcox of Grand Canyon Title, said fewer cash transactions are an indication that fewer investors are coming into the market — a result of a diminishing number of inexpensive homes available.
“We’re through all of our cheap inventory,” Wilcox said. “It’s gone. There’s hardly any left.”
Wilcox said more people are taking out a mortgage to buy a house. In February, over 3,100 previously owned homes in the Valley were sold to people taking out a mortgage — the highest number of mortgage-bought homes in any February since 2006.
Wilcox said the high volume of people moving to the Phoenix area — largely because of more job opportunities — is leading to changes in the area’s housing market.
“There are 47,000 more people in 2015 than in 2014, and we’re going to have another 55,000 by the end of the year,” he said.
“Greater Phoenix lost 300,000 jobs during the real estate recession. We’ve gained back 266,000.”
Mortgage companies require people to be on the job for two years before they can qualify for a mortgage. Wilcox said many people have hit that mark.
With more people coming to Arizona, Wilcox said the Valley could be headed for another housing shortage. He said there are already signs that people are buying new homes because of an increased competition for the purchase of previously-owned ones.
Wilcox said one new home builder in the East Valley recently had people camping out in a subdivision so they could draw numbers for a lottery in the hopes of buying a new home there.
The strong demand for homes coupled with a low supply could be good news for homeowners who could see their home values rise, Wilcox said.