Arizona housing market sparks bidding wars for homebuyers
PHOENIX — Homebuyers throughout Arizona are dishing out tens of thousands of dollars extra in bidding wars to get the home they want.
That’s because there are so many buyers and not enough inventory of houses on the market, according to several realtors who spoke with KTAR News 92.3 FM.
Rodney Wood, a realtor in the Valley, said he’s seeing buyers pay about 10% above asking price. He said several of his clients recently got more than $100,000 over asking price for their homes.
“Sometimes it’s because of just a couple of buyers that don’t want to give up,” he said.
Gary Nelson, a realtor in Flagstaff, is seeing something similar. He said homes in his area are selling for about 5% over asking price.
Nelson, who’s also the president-elect of the Arizona Association of Realtors, said nowadays it’s rare for a home to sell for the price it’s listed.
“We’re seeing that pretty much throughout the state, except for possibly the rural remote areas,” he said.
As for who’s making the big offers, Nelson said it’s mostly buyers from Arizona. He said about half of the buyers he works with are Valley residents looking to buy a vacation home in Flagstaff.
“But we do have some people from California and other states as well,” he said.
Most of the buyers Wood said he’s seeing are also local residents, though he added he has seen more out-of-state buyers than he did a year ago. Most come from western states, including California, Washington and Oregon.
Nelson and Wood added they’re both seeing a bit more cash offers.
As home prices rise, they fear it’s becoming harder and harder for the average person to be able to afford a house.
Home prices in the Phoenix area are growing at the fastest rate in the nation, and they have been for 22 consecutive months. Last month, they were 20% higher than a year ago, according to the S&P CoreLogic Case-Shiller Indices, which is the leading measure of U.S. home prices.
“We’re in historic times,” Nelson said. “We’ve not seen this type of sellers’ market in our area and throughout the state of Arizona and even throughout the nation ever before.”
He advises anyone looking to buy a house to be “very well-placed and ready to go.” That includes having earnest money available, getting pre-qualified with a local lender and working with a “well-versed realtor” who can help buyers win a bidding war.
Nelson also recommends buyers stay within their budget.
“I wouldn’t stretch your family finances a whole bunch,” he said. “That was the kind of danger that we got into in the mid-2000s.”
Wood said he also doesn’t recommend buyers overspend. At the same time, he said it’s hard to tell buyers to wait if they’re not finding a house in their price range.
“We don’t want anybody to do something that they’re going to regret,” he said. “But then again, we can’t advise people to wait because we don’t know when [the housing market] is going to flatten.”