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Everything is going to be ok :) Some helpful links and an Arizona Real Estate Market update.

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I am so sorry everyone is going through the social isolation, fear, and the unknown.  I haven’t posted much and haven’t made many market updates for awhile because we simply do not know at this time.  There is so much misinformation out there spreading fear, its truly hard to even think.  Although we don’t know when the infection rate is going to stop climbing exactly, we do know it will and I will try and update as we go. Information changes daily, and is hard to tell how bad it will get but all I can do is talk about real estate and what the Arizona status is.  Please call me and I can go through this with you if you’re fearful of the market falling or not sure what to do.  Maybe there could be some opportunity?  Right off the bat, the market is still ok, and Arizona is one of the most resilient markets in the US, and I’ll show you why we will most likely come out ok.

I like to stick to the facts like in my past blog on the 2020 housing outlook, here.  But that was before this pandemic came about and I’ve been studying the market like crazy, watching webinars, talking to experts, and reading daily.  I written one doom and gloom newsletter, and one optimistic one and glad I deleted both because they seem outdated now.  These next few weeks are going to get bad as this task force briefing on the 1st shows, click here.

Here are some facts and slides about the Arizona market on why we’ll come out of this better then most.

Facts about the AZ Real Estate market

  • January 2020 Blog with a comprehensive explanation of why Arizona real estate would grow before the Coronavirus. shows how great the market was.
  • March 2020 still set the record for SFH in Maricopa median home price.  April will most likely be bad.
  • List prices must come down before home prices come down and this has still not happened.  It took 6 months before home prices to come down in the last crash in 2007 after it began and it was April to December for the market to change to a buyers market in the last crash.
  • There is still more Demand than Supply in Arizona for now.
  • The Luxury Market will most likely take a bigger hit because of the stock market. Real estate doesn’t crash like the stock market.
  • Be cautious but positive is what most real estate professionals will tell you.
  • There are still showing and deals taking place. We are an essential service and will continue to show homes and sell them.
  • Rental Supply went up 15% in March which we needed in this city anyhoo.  Most likely from the Airbnb’s that flooded the market.  Supply of homes will most likely increase as well in the coming months.
  • 2 Trillion dollar aid package came out March 27th here are the details, click here.
  • Governor Ducey just enacted an executive order- “Stay Home, Stay Healthy, Stay Connected”. The state is following CDC guidelines and is asking everyone to remain at home as much as possible. Governor Ducey’s previous executive order from March 23rd has identified Real Estate as an essential business and that has not changed. Our industry will continue on as normal. I do not believe there will be any restriction for service providers related to our industry (home inspectors, photographers, appraisers, etc…)

Chart 1: Escrow Fall outs between $200-400k homes from Under Contract to Active again.

  • Fear is causing people to back out of contracts the last few weeks for now, but not as bad as you’d think.  If you need a home to live you will continue with the contract.

Chart 2:  Dow Jones Chart:

  • Dow Jones has fallen more in the past few weeks than in the crash in 2017 but its not the same reason.
  • But yes we are in a stock market crash and will affect many.

Chart 3: Supply and Demand index for the Cromford Report

  • This is the biggest factor why your house will still sell.  Our supply is still abnormally high and demand still high which isn’t changing in the short term.

Chart 4: Long Term Perspective

  • Our Arizona real estate boom is because of lack of supply and demand, not bad loans.  This possible mini crash is because of the coronavirus, when 1-2 months go by, we will still have pent up demand spiking the market again.  But……..this can change daily.

Chart 5:  Demand

  • We have everything that would cause demand in this housing market except consumer sentiment which would disappear if there was a vaccine or some positive news or businesses open back up.
  • People are still buying and contracts still happening.
  • As of March 23rd, ibuyers like zillow and offerpad have a paused buying.

 

Some quick facts/links on what is happening on the Coronavirus

What you can do right now if the you’ve been affected!

Hopefully this passes soon if this to shall pass, right?

We simply just have to wait but we have to see what happens.

I hope you can trust me to not spread misinformation.  I do not want to be overly optimistic or doom and gloom.

Stay safe,

Jay Bru

480-466-4917

 

 

 

 

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