The key to understanding local real estate market is through Realtor knowledge

Editor’s note: This is the first of columns tailored for the Scottsdale Independent audience both in print and online of pertinent news regarding the local housing marketplace.

The news is all abuzz these days with information about what is happening in the real estate market. But if you rely on your national newspaper or TV network to tell you whether now is a good time to buy or sell, you may be missing some great opportunities.

Rebecca Grossmann

Rebecca Grossmann

To get the proper perspective on the value of real estate, you have to go right to the source, and that means talking to a Realtor in your local market.

In the real estate industry, we say things like “the three most important factors in real estate are: location, location, location” and “all real estate is local.” As cliché as these sayings may sound, they are true. Some national factors, such as mortgage rates, impact our local real estate market; but more often it is local issues — like job growth, unemployment rates, and lifestyle — that truly dictate the value of homes.

To use a very simple example of “all real estate is local,” let’s take a look at home ownership rates according to the most recent census information. Nationally, about 64 percent of Americans are home owners. The Western United States has a lower rate, only about 58 percent. But if you’re looking at home ownership rates in Arizona exclusively, it’s back up to 66 percent; Scottsdale is at 69 percent; and if you go even more local to the 85255 (borth Scottsdale) zip code, 82 percent of residents are homeowners.

So what’s happening in Scottsdale real estate, and how do you find that information? If you’re thinking of buying or selling, a Realtor is your best source of information. But, as a current or eventual homeowner, you may be interested in just keeping a pulse of the real estate market so you know about the trends and factors that may eventually impact your own home. And that’s where this column comes in.

Currently, Realtors in the Scottsdale area are reporting a strong market. Depending on the geographic area and price range, now could be a good time to buy or sell. However, overall we consider this a “seller’s market.” Typical characteristics of a seller’s market include low inventory of homes for sale, high demand from home buyers, lack of new home construction and rising prices.

This seller’s market can be attributed to a variety of factors, including increased consumer optimism regarding the real estate market, local job growth and low mortgage rates. A majority of metro areas across the country are experiencing a seller’s market, especially the Valley of the Sun, where tight inventory and huge buyer demand has helped current prices return to about 92 percent of pre-crash levels.

The new home market is also beginning to pick up in Scottsdale, with 23 builders offering a total of 37 new home communities in the Scottsdale area. Many of the new home communities are high-end single family homes in north Scottsdale, such as Windgate Ranch by Toll Brothers; however, there are also more affordable options beginning to become available, such as the Diamante community by Meritage Homes in south Scottsdale. A variety of housing types at different price points are necessary for the Scottsdale real estate market to continue to improve.

And, it’s not just about buyers and sellers; the rental market plays an important role in the Valley as well. Last week, Phoenix metro made the top 10 list for “booming rental markets” by Axiometrics. A strong rental market is important, as many homeowners begin by renting in their desired area before purchasing their home.

When it comes time for renewal, many renters compare their options for renting versus owning a home. In the near future, rising rent prices may drive more renters to look toward purchasing a home or renewing their lease at a shorter term so they can buy a home in the near future.

Despite the recent good news and continued optimism from Realtors and consumers, there are always concerns and issues that can negatively affect the real estate market. Right now, some of the biggest concerns for Realtors and property owners are new regulations, such as the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) Integrated Disclosures that go into effect Oct. 3, housing affordability, difficulty qualifying for financing, and appraisal issues. Other regulatory issues, such as flood insurance requirements and rates, could also become an issue.

Thankfully, as a property owner you have an advocate that works tirelessly to mitigate the impact of these issues. As the largest trade association of Scottsdale, the Scottsdale Area Association of Realtors (SAAR) represents about 8,000 Realtors and an additional 300 individuals in affiliated businesses, such as financing, title and inspection.

By using this collective voice to work with local, state and national representatives for our communities, we protect private property rights, encourage economic vitality, and support the American dream of home ownership.

Ms. Grossmann is president and CEO of the Scottsdale Area Association of Realtors.

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