01 Apr Covid-19’s Impact on Arizona Real Estate
Hey Everyone, Elise Fay here—hope you are all doing well and taking care of one another. Concerns about the global impact Covid-19 will have on the economy are real. And they’re scary, as the health and wellness or our families, friends and loved ones are high on everyone’s emotional radar. That said, we can be confident that, while we don’t know the exact impact the virus will have on the housing market, we do know that housing isn’t the driver.
The reasons we move: marriage, children, job changes, retirement etc—are still part of our lives. As a result we are still open for business!
Let me share with you a few facts from yours truly, based upon what we are seeing, boots on the ground. Since March 15th, 2020:
-4040 homes were put under contract.
-3233 NEW listings were added to the market
-3481 homes successfully closed in Maricopa County—those are buyers and sellers who sold their homes and went thru with the sale despite the Corona Virus effect.
Personally, our team has put 19 deals under contract, 25 deals have closed. So if you think these numbers look promising but you are still scratching your head…Here is the how and why. It still goes back to Supply and Demand.
We still have a lack of sellers. Low supply of homes is the result of several factors—I will share with you a few of them.
-New Builds: we have half the number of new builds to the market than we did in the early 2000’s and this is due to labor shortages, some gov’t regulations and in most cases, not enough available land.
-During the last recovery we saw savvy investors and some of the larger institutional investors buy up a lot of homes that were in short sale or foreclosure. These investors were building up their portfolios and had plans to either sell on the upside or hold them as rentals. Well with rents on the rise, as a result of the short supply of sellers, these landlords are NOT selling and instead holding on tight to their investments. Being a landlord IS profitable right now!
-Empty nesters who weathered the downturn in the market years back, are now keeping their homes on average about 13 years—some are still a bit frozen, unable to unlock all their equity. Let’s not forget the HGTV effect that we are seeing on some of these older and dated properties.
Right now, we are seeing that demand is being dampened by the Corona outbreak and as a result we are seeing that inventory is loosening up, making more homes available and in some price ranges, lessening the competition a bit. We are seeing this in the market space where millennials may be entering for the 1st time. Interest rates are still at an all-time low, making owning a home cheaper than renting. Lending guidelines have tightened up a bit but that is another level of protection that has been put in place.
We have a crazy new normal. We are out showing homes, taking greater precautions; we wear gloves, carry hand sanitizer and retain a safe distance. We also have protocols in place to protect our sellers. In Arizona, housing is a huge economic driver for our economy—I am not here to sugar coat anything but just want to let you know that we are not seeing doom and gloom at this point.
