Frequently Asked Questions
Our everyday life has changed due to the COVID-19 virus, but the Russell Shaw Group’s goal of selling homes – quickly and for top dollar- has never changed. We offer a variety of home selling options to maximize both your safety and profit:
Are homes selling during this Pandemic?
Absolutely! In fact, surprisingly this is one of the strongest seller markets since 2006. It is a full blown seller’s market. At the moment, the word “frenzy” best describes it.
Are home prices plummeting?
No. In fact, just the opposite. Price appreciation has been moving strongly upward since May. Demand is high, and supply is low and therefore there is extreme upward pressure on pricing. To put this in perspective, the current supply of properties for sale is about 8,000. Around 30,000 homes for sale represents a balanced market.
How fast are homes selling?
For most properties, they are selling in the first week of our marketing – often with multiple offers and bidding wars. To accurately determine the likely sale time for your particular home, we would need to do a demand/supply analysis of your neighborhood. We are happy to do that with no obligation or expense to you.
Do you recommend selling now or waiting?
Obviously the first concern is selling when it best suits your needs. From a market point of view, getting on the market before the holidays arrive is our recommendation. Given all of our risk-reducing selling programs, the virus is not really a consideration of when to sell.
Are there any buyers still buying?
Yes. With interest rates at historic lows and the rental rates rising, buyers are buying. In fact demand is about 67% above normal levels at the moment. People must live somewhere. When owning is cheaper than renting, they buy. Shelter, like food, is not optional.
How can we sell safely during COVID-19?
What has changed in this market is HOW we sell homes (not IF we sell them – of course we do!) Occupied homes present a different challenge than vacant homes. We have 3 basic methods of selling: cash offers, traditional marketing, and our “virtual” selling program that eliminates showings. What hasn’t changed is our ability to sell your home for top dollar. Call us to discuss all of the options best suited for your situation and needs.
Are lenders lending?
Yes. But, we have seen fluctuations in lending guidelines – so it is important to discuss with a qualified lender what the current guidelines are. Uncertainty in financial markets tends to result in revised FICO score standards and debt/income ratios.
What if I or a family member gets Covid-19 while selling our home?
Alert us immediately. Depending on where we are in the sale cycle (on market vs. sale pending) we will take all appropriate steps to ensure your safety and the safety of the buyer- which is always our highest priority. The Arizona Association of Realtors has a new Covid 19 addendum that can be used in your contract that allows for time extensions to accommodate any shifts due to Covid 19 – including recovery time.
If this market is the strongest seller market since 2006, are we headed for a housing meltdown all over again?
No. The virus and its impact is very different from “the bubble” of 2005 and its subsequent bursting. The best explanation of why these are different comes from the Cromford Report and the brilliant Michael Orr.
“In 2005 the housing industry started to sicken because homes were being used as speculative commodities not for places to live….
“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…
“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.”
What does the future of real estate look like?
We anticipate this year to continue to be a market that strongly favors sellers. We do expect a shift in 2021 with more supply coming to market (sellers). We base this on the artificially low number of foreclosures currently, as well as the upcoming expiring of a number of government programs designed to keep people in their homes (i.e. forbearance & unemployment payments).
The level of uncertainty is so extreme right now that forecasting the future beyond generalized predictions would be foolhardy. But, we do track the numbers and the numbers can answer the state of the market on any given day.