Chandler AZ Home bidding wars ~ FHA Buyers often lose the battle

Unbelievable.  The one word that describes what’s happening in the Chandler AZ real estate world.

Inventory of homes for sale in Chandler, AZ continues to fall.  The chart below illustrates the highs and low of our market within the last 7 years.

Chandler home inventory

At the height of our Buyer’s Market inventory of homes for sale in Chandler topped out in September 2007 at right around 2500 homes. We saw an all time low of 235 homes for sale in March of 2005.  Today, according to the Cromford Report we are at 787 homes for sale, but that number is deceivingly high because it also includes homes that are under contract and listed as Active With Contingency (AWC) which is how most short sales and REO’s are listed when they waiting for a bank decision, so these homes are not technically “active”.

Here are the numbers according the Arizona Regional MLS today. ***Interesting to note…while I was writing this post, the total active listings in Chandler, AZ fell to 401…5 less than when I started the post 30 minutes ago.

Active homes for sale

How many? 406 which includes condos, townhomes & manufactured homes.

55 of those homes are in Active Adult Communities which takes the number down to 351.

Of the 351 homes (not in Active Adult Communities)~
262 are traditional resale homes (not short sale or lender owned)
237 are Single Family Homes (not condo, town home or manufactured)

What are the price ranges for those 237 homes?
Under $100,000  ~ 1 home
$100,000-$199,999 ~ 27 homes
$200,000-$299,999 ~ 53 homes
$300,000-$399,999 ~ 59 homes
$400,000-$499,999 ~ 33 homes
$500,000-$599,999 ~ 21 homes
$600,000+                 ~ 43 homes

Does Financing Matter?

Here’s a problem many buyers are experiencing.  The type of financing you are using along with the amount of your downpayment could be killing your chances.  Interest rates are low and you can still qualify to purchase a home with low down payments via FHA financing.  HOWEVER… of the 237 homes that are available…ONLY 141 are being offered to FHA buyers with only 17 of those homes under $200,000. The same holds true for VA financing, unfortunately.

Why?  The issue is often appraisals.  Home values are rising quickly due to bidding wars, cash buyers and conventional finance buyers who are removing appraisal contingencies and paying cash above the appraised value at closing.   With homes being bid above appraised value, an FHA or VA offer cannot compete due the appraisal which will likely come in below purchase price and will often kill the deal.

Additionally, FHA & VA Buyers who are requesting funds from the seller (seller concessions) for closing costs are going to find it almost impossible to get an offer accepted when competing with cash and conventional offers who are not requesting those contributions.

It’s time for buyers to understand they have to save their money if they want to purchase a home in today’s market.  They will need funds to close.  Good credit scores along with funds for a down payment to qualify for conventional financing are more important than ever.



About The Amy Jones Group

Mindy Jones Nevarez is the owner of Amy Jones Group Keller Williams Integrity First. The Amy Jones Real Estate Group has been recognized as the #1 Real Estate Team in Chandler by the Phoenix Business Journal and voted Best of Our Valley for 4 years.

The Amy Jones Group specializes in real estate in Chandler, Sun Lakes, Gilbert, Mesa, Tempe, Ahwatukee, and Phoenix.