In last month’s Cromford Report, we discussed a seasonal exception and benefit for luxury home sellers as the report stated, “Summer is a good time to list luxury properties over $500K.”
Good News for Buyers
If you end up selling your luxury property this summer, and quickly, then home affordability is up as The Cromford Report states, “Mortgage payments are lower than they were 13 years ago.” Although interest rates have been increasing along with the inflation rate lately–it has not affected general affordability. How is this possible?
One large factor is that the median family income has increased. As long as those with the median family income can still afford anywhere from 60-75% of what is sold in the area during a quarter, then the measurement is considered “normal.”
Another factor has to do with the inflation rate increasing on houses and the interest being lower than it would back in 2005 for example. This means that there is a significant drop in the principal and interest rate amounts.
So-So News for Sellers
For sellers, the current appreciation rates of 6% or more are not sustainable in the long term. The Cromford Report continues, “However, that doesn’t mean that prices will ‘peak’ or ‘crash’ anytime soon. Most likely as demand slowly wanes, prices will go flat and hang out until they once again fall in line with the rate of inflation, but don’t expect that to happen in 2018.”
June brings good news for buyers and so-so news for sellers. For more comprehensive insights on the Phoenix Metro residential real estate market–take a look at The Cromford Report infographic for June.
Image Credit: Cromford Associates LLC and Tamber Consulting LLC
Let our vision and our experience provide you a new appreciation of your real estate.