We gained a bit in inventory since last month, thank goodness! The inventory gods held out a little longer this year than they usually do and we are thankful to have a little bit more selection on the market these days. For buyers, this is great news. The homes that are properly priced for their location and condition are flying off the market still, that’s true, but there is a little more for everyone to choose from now which eases nerves a little bit. And sellers, have no fear. The name of the game is price and positioning. It’s still a sellers market.
I’ve been watching the numbers and talking with colleagues and there have been no massive changes in the real estate market here in AZ since the Coronavirus hit.
March surpassed February’s closings with a very healthy amount of pending sales that are likely to close in April. The inventory levels are still low and we are still seeing demand in our market place.
I’m seeing (and hearing) a normal amount of cancellations and, of course, not all related to the current situation that the world is in. There are many reasons that would cause a sale to cancel. Except for those iBuyer companies (not surprised TBH), they are canceling on purchasing homes which is likely leaving many sellers in a pinch as they scramble to figure out a Plan B… and are likely halfway through moving. 😱 This is probably better for the sellers in the long run IMO because those companies always take way more than they are worth and give less than they promise anyway. If you don’t know what an iBuyer is, message me and I’ll explain.
Though we are in uncertain times, it’s definitely helpful that equity is plentiful in many of our homes and homes financed with subprime loans are very few and far between. This is good. Also, not everyone is out of work and very few in our immediate buyer pool have been affected by this situation.
As always, if you have any questions about this update or anything regarding AZ real estate, please reach out. You don’t have to be in the market, one of our clients or even in AZ. I love real estate and I’m happy to talk about it anytime.
Stay strong and healthy,
Hello friends, family and clients of Team EvoAZ at eXp Realty. We hope this message finds each and every one of you well. We felt it important to connect during this time to give you accurate information concerning the real estate market here in AZ especially since we have been getting so many questions from many of you. This is NOT fake news. Be careful out there, there is a lot of assumption going around.
Please contact me with any questions about the current market conditions and your personal situation.
PS: We will always be here for our clients as a trusted, experienced resource. We will never close our doors to our clients and friends and will always continue to serve even in times like these when we have to be creative. Due to the current circumstances, we have alternative ways to market our listings and help our buyers find their dream homes right now and have not slowed or closed like other companies have such as Zillow, Open Door and Redfin. We are humans, just like you, and we will continue to be humans serving humans for the duration.
REAL ESTATE UPDATE
CREDITS: This article is originally from Michael Orr
Important information regarding our real estate market from the most intelligent person on the subject: Arizona Real Estate Economist, Michael Orr 🏡
March 18 – A number of people seem to assume that we are heading for a recession and that home prices will fall. The first assumption is quite reasonable. The second assumption is based on fear and has little analytical data to back it up. Obviously anything can happen in a uncertain and disrupted world, but a fall in home prices is still looking very unlikely from today’s numbers.
In 2005 the housing industry started to sicken because homes were being used as speculative commodities not for places to live. In 2005 I met a man in his early 20s who owned 12 homes in the Phoenix area, all with no occupants. How had he been able to buy them? 100% loans from unscrupulous lenders who went bust between 2007 and 2010. The housing industry (and more particularly the lending industry within it) was the cause of the 2008 recession. Phoenix was a hot spot for the cause of the problem, as was Las Vegas.
In 2020, housing is an innocent bystander to a probable recession caused by a pandemic. It has supply at extremely low levels and most homeowners have a large amount of equity. Even if they lost all their income and could no longer pay their mortgage, they could quickly find a buyer to release that equity. There is little likelihood of them facing foreclosure because the lender can be paid off with the sale proceeds. Only when demand collapses do the banks have to foreclose to get their money back. At the moment demand is still well above normal and has only shown very tiny signs of easing. In 2006 demand fell off a cliff yet home builders continued to build even more new homes because lenders continued to write ill-advised loans in huge numbers.
In 2020 builders are probably going to have to build fewer homes than they wish because of shortages of labor and materials. We are unlikely to see a glut of homes on the market for a very long time. A successful vaccine for the novel corona virus is more likely to appear before a surplus of homes could possibly develop.
Because the virus has not been contained yet, except in several parts of Southeast Asia, we are likely to see a lot of people out of work. We do not yet know how long it will take to get control of the pandemic in Arizona, but many people may be out of work for quite some time. These people are more likely to be renters rather than homeowners. Landlords may find it much harder to collect rents and the yields from their portfolios are likely to fall. Some may decide to evict tenants and sell their properties. At the moment the extra supply would be welcomed and receive multiple offers, even in these troubled times. The evicted tenants still exist and therefore still represent demand for shelter of some sort. There will be hardship, but not a flood of homes with no-one to live in them.
Housing demand is created by the existence of people and increases when more people turn up and decreases if they go away. In 2005 the people we were building new homes for were largely imaginary. In 2020 they are very real and migration trends have been very favorable with families and individuals moving to Arizona from other parts of the USA.
All the indicators for the Central Arizona housing market remain very healthy at the moment and we will report any change as soon as we spot one. There is no cause for panic and if you are delaying a purchase because you think the price will come down, you are probably making a poor decision.
On Sunday there was a big announcement by the Federal Reserve, and here’s the break down on the impact this will have on rates.
The FED took two big actions:
1) The Federal Reserve cut its benchmark interest rate to near zero
2) They plan to purchase $700 Billion in Mortgage Backed Securities & Treasury Bonds
The Benchmark Interest Rate actually doesn’t have a direct impact on mortgage rates, it mainly impacts short-term and variable rates (for example, auto loans and lines of credit). But the purchasing of mortgage backed securities will directly lower rates.
It’s yet to be seen when and how the $700 Billion will be spent, but the FED is going to try to keep mortgage rates from going up (there was a .50% rate increase between Tuesday and Friday of last week). Their goal is to keep them low to keep the housing market strong.
We’re hoping to see rates in the low 3’s or possibly the high 2’s in the near future. If you have questions about the current market conditions, please message me anytime.
5+ bedrooms 3+ bathrooms
Home with downstairs ensuite or bedroom bathroom and also pool
3+ bedrooms, 2+ bathrooms
Zip Code 85254 & 85260
Recently remodeled and not a lot of landscaping maintenance
4+ bedrooms, 2+ bathrooms
4+ bedrooms, 2+ bathrooms
South Phoenix, Laveen, Deer Valley, Desert Ridge, North Phoenix
3+ bed 2+ bathrooms with detached studio/guest house
DT Mesa Historic Districts
4+ bed 2+ bathrooms
Mesa, Gilbert, Chandler, Scottsdale, Central to North Phoenix
2+ bedrooms 1.5+ Bathrooms
Condo in Chandler, Ahwatukee, North Phoenix
1+ bedroom 1+ bathrooms
Condo in Dobson Ranch area or close by
1+ bedroom 1+ bathroom
Located in Cloisters Subdivision in Biltmore
3+ bedrooms 2+ bathrooms
San Tan Valley, Florence, Queen Creek
2+ bedrooms 2+ bathrooms
Fountain Hills Condo, Town home, or Patio Home
3+ bedrooms 2+ bathrooms
Located in Loma Verde Gated Subdivision in Mesa
300k and under, Chandler/Gilbert 3/2 single level
We know that many of you are home with the kids while school is shut down. Here is a HUGE list of educational resources that will more than help keep them busy and learning during this time. Best of luck, parents!
Please call or text me if you or a friend has a real estate need or question or you need a referral for any product or professional service.
Take care and we’ll see you when this is all over!
But, we don’t think it will go out like a lamb. Interest rates are at their lowest in years upon years, housing inventory is about there too and the new home builds are going up fast and furious. Buyers, strap on your seatbelts, this is going to be a wild ride but better to take it now than when prices (and interest rates) are higher. Oh and sellers, if you are thinking you need to call one of those online companies that buy your home for pennies on the dollar, think again. You don’t. Your home will sell. Call us.
The amount of listings taken in January is up compared to December 2019. The interest rates are still extremely low but, at this time of year, inventory levels aren’t usually quite this low overall. January home sales are at about 1300 or so less than December 2019 but we are still deep in a sellers market as we move into February.