The real estate market is often fluid; sales rise and fall as the market changes. In November there was a decline in the number of home sales in Phoenix. In the greater Phoenix Valley region, 6,064 homes sold in November, a decrease of over 1,000 homes from the prior month’s sales. This decline in real estate transactions appears to be a temporary drop due to a number of factors.
One reason sales may have declined late last year is due to new federal mortgage rules that have caused a slowdown in home sales. The Truth in Lending Act and RESPA Integrated Disclosure rules, known as TRID, took effect in October. These new regulations that apply to buyers seeking a mortgage may be impacting the number of real estate transactions. Under the new regulations, three days after a buyer applies for a mortgage, he or she must receive a loan estimate form, which is intended to provide buyers with more information before the final closing. At least one Arizona housing expert believes that TRID has delayed real estate closings and therefore created lower sales volume.
Another potential reason for the slowdown is a lower demand for luxury homes in the greater Phoenix region, which is at a low point. Additionally, a dearth of more modestly priced homes on the market may be causing homeowners who are looking for a home priced under $250,000 to delay purchasing.
Fortunately, signs point to an uptick for December sales, as borrowers and lenders grew accustomed to the new rules. If you are considering buying or selling a home in Phoenix and have questions regarding the new regulations or other requirements, you may wish to consult with an attorney for assistance.
Source: azcentral.com, “Don’t panic: Drop in home sales in metro Phoenix just a blip,” Catherine Reagor, Jan. 15, 2016