Greater Phoenix Market Conditions

Greater Phoenix Market Conditions

I’m always extremely cautious about using real estate “averages”, as they can and do often skew the true picture of individual communities and areas. Nevertheless, there are a couple of points that are worth noting in the above charts.

It’s interesting that normally at this time of year we experience an increase in listings – and yet the past 2 months has seen a decrease in listings. Anybody care to speculate on the reason(s) for this anomaly?

The next observation is that the greater Phoenix market is holding fairly steadily in the number of Active listings as well as sales.

Additionally, at roughly 4.5 months inventory, the greater Phoenix market appears to be showing some consistent stabilization.  As always, time will tell.

NOTE:  The information and statistics contained in the above charts are deemed reliable, but not guaranteed. If you’re contemplating a major financial decision regarding residential real estate, please do yourself a huge favor and consult with a reputable real estate broker, attorney and/or accountant.

The APR is NOT the same as your interest rate or “note rate.” APR consists of a combination of both the amount of interest you will pay based on your note rate and the APR fees associated with your loan. The purpose of the APR is to gauge whether or not your loan is “fee heavy.” For example if your note rate is 5.25% and your APR is at 7.5% you know there is a problem based on the drastic difference. It is important to note however that APR will almost always be higher than your note.

For example, in a scenario where the interest rate for a home loan (“note rate”) is 5.5%, the first piece of the equation would be calculated by obtaining the interest paid on the loan at 5.5%. The second part of the equation would include any fees that are considered “APR fees” (meaning they get included into the APR calculation).

Lastly, these two totals are added together and then recalculated and expressed as your APR.

The key definitions to remember are as follows:

• Interest Rate or “Note Rate”: The amount of interest you pay on your home loan. This is the percentage that has been quoted to you as your “rate.”
• Annual Percentage Rate – APR: A disclosure tool or number that is used to help consumers understand the total fees their loan has by comparing the difference between the APR and the Interest Rate.

If you have questions, do NOT hesitate to ask your Mortgage Consultant for clarification.

I have a personal conviction that real estate should not be micro-analyzed, so I’m electing to not draw any conclusions or speculations from the latest “averages.” It’s clear that prices, on the average, are on the rise. Other than that, all indicators point to a bottoming of the residential real estate market in greater Phoenix.

As always, the information and statistics contained in the above charts are deemed reliable, but not guaranteed. If you’re contemplating a major financial decision regarding residential real estate, please do yourself a huge favor and consult with a reputable real estate broker, attorney and accountant.