Is It Time to Take Your Winnings and Leave the Casino?

By Arizona Home Group

Sell your home fast and net thousands more. We’ll make sure you get the absolute top market dollar for your home. We’ve helped thousands of buyers and sellers over the past 30+ years with over 200 5-star reviews.

Last month, we shared a look at the appreciation Arizona has experienced over the past five years since COVID, and today, we want to pick up where that conversation left off. We showed you a map of the entire country highlighting home price appreciation in all 50 states during that period, and Arizona stood out with 65.3% growth. That’s a remarkable run by any measure, and as we said at the time, it’s both unprecedented and unsustainable.

We believe your home is worth the most it’s probably ever going to be worth. That’s the message we’ve been sharing in every consultation we have right now, whether it’s a homeowner in Scottsdale, a family in Gilbert, or someone in a starter home in Mesa. Across all parts of the valley and all price points, the picture looks the same. The massive appreciation wave that Arizona rode over the past five years has crested, and there isn’t much room for prices to go anywhere except down.

This is not a crash. We want to be clear about that. We’re not predicting a 2008-style collapse, and prices are not going to drop 20% in a year. What we’ve seen instead is a very slow, very steady erosion of pricing over the past three years, and we expect that trend to continue for the next three to five years. It’s the kind of decline that doesn’t make headlines, but it chips away at your equity month after month in a way that adds up.

Interest rates are a big part of the equation. Right now, the 30-year fixed mortgage rate sits around 6.4%, and we don’t see a compelling reason for the Fed to lower rates significantly under current conditions. Inflation continues to rise, the cost of living keeps climbing year over year, and global instability hasn’t given the Fed the kind of environment where aggressive rate cuts make sense. We’ve read research suggesting the market would need rates closer to 5.5% to generate any significant movement from buyers, and right now we’re a full percentage point away from that number.

What this means for your equity. If you’ve owned your home for five or more years, you’ve more than likely built a significant amount of equity, and that’s genuinely great news. But if you’re thinking about selling, whether that’s now or within the next couple of years, it’s worth understanding that the equity you’ve built may already be shrinking. The combination of slowly declining home values and a buyer pool constrained by high rates means the window to capture the most value from your home may be narrower than it feels.

We’re not here to scare you. We simply want to make sure you have the facts so you can factor them into your timeline. When to sell is a deeply personal decision, and it involves a lot more than market data. But the market data matters, and right now it’s pointing in a direction that favors sellers who act sooner rather than later.

If you’d like more specific information about the equity in your home and what’s happening in your particular neighborhood, we’re happy to come by for a consultation. It takes about 30 to 40 minutes, and you’ll leave with a clear picture of where your home stands in today’s market. Call or text us at 602-571-3730, email us at john@arizonahomegroup.com, or visit ahgnationasks.com. We’d love to help you figure out your best move.