The Housing Market Reaches Extremes
It may come as a shock to most that the real estate market has become the strongest seller market since 2005. This may sound preposterous. How could the real estate market swing so strongly in favor for sellers when Maricopa County is currently grabbing headlines nationwide for its escalating virus numbers?
The virus and the real estate market numbers have a causal relationship. The “stay at home orders” and fear of infection are causing a large population of would-be-sellers to move to the sidelines. Particularly impacted are the 55+ communities – not surprising given that they represent the most vulnerable population. Add to that governmental orders forbidding foreclosure for non-payment and elevated payouts for unemployment – and you have the formula for sellers staying in homes whether they can afford them or not, whether they wish to sell or not. Please understand we are not making any political statements – rather just commenting on what is happening as an unexpected consequence in the real estate market. Here are some shocking numbers to consider by Tina Tamboer of the Cromford Report:
“Greater Phoenix has a population of approximately 4.8 million people and 1.4 million single family homes, condos and townhomes in total… As of July 8th, only 8,579 of these units were available for sale through the Arizona Regional MLS. If that number doesn’t cause you to gasp, then this might: only 1,023 are single family homes under $300,000 and that number is diminishing every day.”
Demand from buyers, conversely has surged. Historically low interest rates combined with prices not yet soaring out of range, has added fuel to demand. This leaves us with several conclusions:
- If you are a buyer, please brace yourself for very few choices and extreme competition from multiple buyers for every home. Still, buy now if you can before prices and interest rates move higher.
- If you are a seller, don’t wait forever to go on the market. You have a window of opportunity. The 2005 market taught us that extreme markets never last. That market shifted very quickly when it shifted. What is unknown is when our current market will turn. But at some point, unemployment rates cause homeowners to sell. Skyrocketing prices and interest rates eventually dampen demand.
- There are ways to sell safely that don’t require homeowners giving away their homes. We are currently selling homes with virtual showings or no showings until point of accepted contract. Risk can be managed without sacrificing safety.
If you have questions about the market – as always, call us 602-957-7777. We are watching these market patterns closely.
Russell & Wendy Shaw