(Photo by David McNew / Getty Images)
PHOENIX – Home buyers across Arizona are spending tens of thousands of additional dollars in bidding wars to get the home they want.
That’s because there are so many buyers and not enough homes in the market, according to several brokers speaking with KTAR News 92.3 FM.
Rodney Wood, a realtor in the Valley, said he saw buyers paying about 10% above the asking price. He said several of his clients recently got more than $ 100,000 off the price of their homes.
“Sometimes it’s because only a few buyers won’t give up,” he said.
Gary Nelson, a realtor in Flagstaff, sees something similar. He said homes in his area are selling for about 5% above asking price.
Nelson, who is also the president-elect of the Arizona Association of Realtors, said it is rare these days for a home to sell for the advertised price.
“We see this pretty much across the state, except possibly in the rural remote areas,” he said.
As for the big deals, Nelson said they are mostly Arizona buyers. He said about half of the buyers he works with are Valley residents looking to buy a vacation home in Flagstaff.
“But we also have some people from California and other states,” he said.
Most of the buyers Wood sees are also local residents, but added that he has seen more buyers outside of the state than a year ago. Most are from western states, including California, Washington, and Oregon.
Nelson and Wood added that they are both seeing a little more money offers.
As property prices rise, they fear that it will become increasingly difficult for the average person to be able to afford a house.
The Phoenix area property prices are rising fastest in the country for 22 straight months. Last month, they were 20% higher than a year ago, according to the S&P CoreLogic Case-Shiller indexes, the leading measure of US house prices.
“We are in historic times,” said Nelson. “We have never seen this type of seller market in our area, or in the entire state of Arizona, and even in the country.”
He advises anyone who wants to buy a house to be “very well positioned and ready for use”. This includes having serious cash on hand, pre-qualifying with a local lender, and working with a “savvy broker” who can help buyers win a bidding war.
Nelson also recommends buyers stay on budget.
“I wouldn’t put a multiple burden on your family finances,” he said. “That was the kind of danger we got into in the mid-2000s.”
Wood said he also doesn’t recommend shoppers spend too much. At the same time, he said it’s hard to tell buyers to wait if they can’t find a home in their price range.
“We don’t want anyone to do something they will regret,” he said. “But then again, we can’t advise people to wait because we don’t know when [the housing market] becomes flat. “
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