Phoenix Housing Market Insights: Q&A with Waqas Ellahi
Waqas Ellahi left the corporate world behind in 2016 to work full-time in real estate in Phoenix. He sees his role as advising people on maximizing their investment, whether they’re buying or selling their home. And he aims to guide them to ensure that every dollar is utilized in the best manner possible.
This expertise is important in Phoenix, which has been one of the hottest real estate markets in the U.S. The housing market in the Greater Phoenix area recovered after a Covid-19 slump, with demand soaring to new heights before cooling and shifting more buyers’ favor.
How did you get into real estate?
I transferred from corporate America because I always wanted to run my own business, and I always loved helping people. I’ve been doing this since 2016 and have really enjoyed it.
I moved from Chicago and came to Arizona in 2012. It was a job transfer at the time which had me come out to Phoenix, and I’ve loved every moment. I really enjoy Phoenix. I know the summers get hot, but as long as you’re indoors, you can get through the summer. The rest of the year is beautiful.
What to Know About the Housing Market in Phoenix
What is the state of the current housing market in Phoenix?
We’re at a very interesting stage right now. We’ve gone through the craziness that we had—actually, even before the pandemic. But once the pandemic hit, we had a couple of months that were rough because nobody knew what was going on. We had these lockdowns, and I honestly feared the worst at that point because they wouldn’t let us go out. You couldn’t do anything, and then, lo and behold, once they opened some stuff up, people were still scared, so they weren’t putting houses on the market. So the demand just became extraordinary.
If you wanted to buy a house, you didn’t have anything to choose from, up until I would say three, four months ago. As a buyer, you were just like, “Just give me something, I don’t care what. Just take the money and give me a house.” We would walk into lines and lines of people at a single home that would become available. I remember telling some of my clients, I was like, “Okay guys, it’s okay to hang in there, we’ll get our turn.” But now the last three, four months, I do feel like the market has shifted.
How is the housing market shifting?
I would not say it’s declining. I think the biggest factor is interest rates. As a buyer you can pay somebody $10,000, $20,000, $30,000, even $40,000 extra because you can afford it with the rate, but when that rate doubles and even more than doubles… some people are at 2.7% or 2.8% now we’re talking 6% to 6.5% depending on their situation. So now that makes it harder for a buyer to afford a home, and some of them don’t even qualify anymore.
So I think what you’re going to see is that buyers can be more careful about their decision-making and pick the right home for them. I think it’s good for the market in that sense. And it’s going to be very interesting. I think these next few months coming up, what they do with the rates is going to continue to define our market.
Have you seen any local trends in and around Phoenix?
In Phoenix and Austin, we were the hardest markets in the U.S. literally for two, three years. The reason being, because we had big traffic coming from all over the country, but specifically from California, because Los Angeles and the Bay area were getting so crazy with the prices that a lot of people would sell their homes in Los Angeles or in San Francisco, San Diego, and come and buy a home or even two homes there. They would come in and make these crazy cash offers. That made the market harder and harder and harder in Phoenix because no matter how expensive the house was, it was pennies compared to California.
But now, because of the rates, they’ve brought more houses to the market. So it’s not as crazy as it was. Let’s say an average market has about 17,000, 18,000 homes available at a time. We had some times in March when I would say there were 4,000 or 4,500 homes—that’s it—to choose from. So you can imagine when you have 10,000, 15,000, 20,000 people, or 25,000 people looking, and they only have 4,000 homes to choose from, it obviously makes it like wars basically. But now we’ve had about 17,000, 18,000 homes on the market. So that’s what I think you’re going to continue to see if the rates stay high.
Do you have any tips for first-time homebuyers?
Definitely, it’s a much easier time to buy right now compared to four or five months ago when you basically were priced out. Definitely save as much as you can. That would be the number one tip because it’s not as simple as saving 5%. You want to save, if you can, 8, 9, 10%, or even more because not only does that give you more equity in the house, but it also makes your payment lower. Some people think they’ve saved 5% and that’s it they’re done. But you’ve got to save for closing costs as well. Nobody tells you about that. That’s why I would say save as much as you can being a first-time homebuyer. And I would say go ahead and buy, because homes are expensive in general, but how much sense does it make to rent a home?
There are some people all over the country who are paying record rent right now. And they go up every year. I was talking to somebody a few days ago. You know what she told me? Her friend’s rent went up by $500. Oh my gosh. Like, are you serious? So just not having to deal with that is worth it if you can afford it, as long as you’re settled. I tell people, as long as you’re settled, and you’re not going anywhere in the next two, three years, as long as you have the money, and as long as you have the mindset, go ahead and buy.
And what about second-time buyers or people who are looking to refinance?
For experienced buyers, I give them the same advice because it helps you build some fortune for yourself. Where else do you put your money? The stock market? And we all know how that is right now. There’s so much volatility in the stock market. You can keep it in your bank account. How much does that do for you? So I tell people if you have the money and as long as the numbers make sense, it’s always good to buy. Could be an investment property, or even maybe sell and buy a bigger home.
Obviously, there are some times when you have to watch. That’s why we look at the numbers whenever we make a decision to see if the numbers make sense. If they don’t make sense, I tell people, “Hey, just wait another year or wait six months.” As far as refinancing, same thing. The biggest thing with refinancing is the price. So that question comes up a lot right now with the rates. Hey guys, where are these rates going? They keep going up. I tell people the most important thing is the price of the house because you can’t change that. You know, once you buy a house, six months, a year later, the rates go down, you know what? You can refinance. So that’s why the biggest thing is now the price of the home itself.
Getting Phoenix Real Estate Referrals
How about real estate agents? Any tips or insights on growing their network and getting referrals?
If you take care of people, they will pass the word for you. It’s like any other business, you take care of people the first time, and the second time they will take care of you. They will tell their friends. They will tell their family, brothers, sister, mom, dad, whoever. Most of my business is referral based. It comes from referrals from my clients, my previous clients, my friends, colleagues, people who I go to the mosque with, and people who I just run across on an everyday basis. Talk to people. The biggest thing I could tell you is to talk to people, talk to people, talk to people about what you do.
Also, don’t be pushy. Take care of the folks you get in front of—that speaks volumes when you do that because they can actually see it rather than hear it. And just be honest, be upfront. If something is not right for them, tell them, “It’s not a good fit for you, unfortunately.” People love hearing that because they can tell this guy’s being honest, you know?
Getting Pre-Qualified Phoenix Home Buyer Leads
What would you tell real estate agents about working with Guidance Residential?
Well, just know, as a real estate agent, that people that come to Guidance, they do so mainly for faith purposes because in Islam, we are directed to avoid interest as much as we can. And the way the traditional American system is set up, it has interest in it. The main difference here is they’ll have a document or two that will say it’s a shared ownership model. The model is set up differently. It eases concerns for these folks. So just know the crowd you’re working with.
Some people go with Guidance for faith purposes, and some of them like to work with people with a similar culture and similar understandings. You feel more comfortable with somebody who’s from your community or from your country.
The consumer itself is not much different. They want the same thing. They want good customer service, people who are honest, somebody who’s there for them, somebody who’s a good guide for them. And who’s honestly willing to guide them? So just keep that in mind. Nothing else changes. As real estate agents, we don’t deal much with the financing part. We just advise them as to what’s best for them. We give them both options—they choose who they want to use. But generally, the same principle applies as far as customer service.
How has your experience been with Guidance Home Services’ referral network?
The guys at Guidance Home Services are on top of their game. I get emails about whoever I’m working with—the client or prospect, they will check up on me. I get weekly emails or even phone calls. “How’s that client doing? How’s their search?” They make sure that the client is being taken care of, which is definitely a good thing.
Communication is the biggest thing with everything. I take care of my clients, build good connections, and so does Guidance Home Services. That way they feel comfortable sending somebody over to me and I feel comfortable sending somebody over to them, and we kind of just work as a team together, help each other out. And most importantly, we take care of the customer.
The Bottom Line: Communication Is Key
Buying and selling a home is a complex experience, and it takes good communication with a strong network to make the process run smoothly.
For homebuyers and homeowners, it’s essential to find a strong team that includes a dedicated and knowledgeable real estate professional like Waqas, and a home finance professional who understands your needs and goals. Get pre-qualified for financing in fewer than 10 minutes with Guidance Residential now.
For real estate agents, communication with clients and communication with industry partners is key, and a solid referral system can help you build a thriving business. Join the Guidance Home Services Network to start receiving homebuyer referrals today.