Is it a buyer, seller or appraiser market?
The supply of real estate in Phoenix remains low, but some real estate experts are expecting a spike in movement during the fall. Over the summer, prices increased across the Valley, which was a reaction to the seasonal shift. The Phoenix market is very much a sellers paradise, but bank appraisals are causing some bumps during transactions, according to The New York Times.
A homeowner just outside of Phoenix put his ranch-style home on the market, and buyers immediately jumped on the house. Because supply is so low, homes are on the market for a much shorter period of time that they have been since the housing bubble burst. This is giving sellers the opportunity to chose the highest bidder, and even though homeowner Justin Olson listed his home for $197,500, he chose an offer of $210,000. However, his home was appraised for less than his asking price at $195,000, which limited the amount a bank would offer.
This is a common trend and many realtors are blaming appraisers for the slow moving market. According to the news source, more than one-third of deals have been broken, delayed or forced into re-negotiation, because buyers can’t afford to pull more money out of their pocket to purchase a home. Some agents are now adjusting their contracts to determine how much a buyer would be willing to pay in cash if an appraisal came in less than expected.
Tension is growing between agents and appraisers, who make an assessment based on a variety of factors such as location, square footage and trends in the market.
“Appraisers don’t set the market; they reflect what’s happening in the market," Ken Chitester, a spokesman for the Appraisal Institute, a professional association told the publication. “So don’t shoot the messenger. Blaming the appraiser for a bad housing market is like blaming the weatherman because you don’t like the weather."
In areas like nearby Glendale, there is a significantly small amount of homes on the market. According to local real estate expert Mike Orr, in a normal market there would be roughly 34,000 homes available, but across the Valley there are only about 13,000 homes. In Glendale, the amount of homes decreased by 76 percent year-over-year, and experts believe that this is going to continue to drive prices up over time.