3OYS REAL ESTATE: Valley home sales rekindling following brief pausePosted: Updated:
PHOENIX -- 2013 was a great comeback year for new construction. In fact, there was nearly a 14 percent increase in new home closings according to R.L. Brown, a company that's been analyzing valley real estate trends for years.
And while new home sales were up in 2013, sales for existing homes started off red hot. However, they finished with three percent fewer sales than the year before. "Activity slowed pretty good and you know, the phones weren't ringing like they were before," says Dean Wegner, a mortgage and real estate specialist who's been in the industry for 20 years.
"Homes were sitting on the market a lot longer. People weren't buying as many homes as they were before," he says.
Wegner blames a few factors for the slowdown in existing sales. One issue was the implementation of Obamacare. Because so many people were unsure or simply confused as to how the new law would affect their bottom line, the market cooled off, Wegner says.
The other factor was that interest rates went up, making home buying less attractive. "Well, we hit all-time record lows last year for interest rates and it was around the three percent range for quite some time, and it was just always there. It wasn't fluctuating, and then when rates spiked to almost five percent there was this stigma that made people feel they're getting a bad deal."
But that stigma has relaxed and is encouraging home buyers to jump back into the market before rates go higher. Dean says following the holidays, the industry really picked up steam, and that it's tuned into somewhat of a "buyer's market." In fact, on the day we visited him, four new sales contracts came across his desk. "Now i think enough time has passed that people are comfortable engaging in real estate again," he said.