An insight into how the Coronavirus pandemic can affect house sales in Phoenix, Arizona
What is Happening Now:
So far, Arizona's housing market seems to be standing up to the corona pandemic reasonably well. The stock markets have been tumultuous; however, Tina Tamboer with the Cromford report said:
“The stock market has been crashing for weeks, but we have only seen some pullback in the housing market, even for million-dollar homes,”
She furthers her statement by saying:
“Remember in 2008, the stock market crashed because of real estate,” she said. “Real estate doesn’t crash because of the stock market.”
Statistically speaking, the amount of pending houses is still 9% higher than last year. People seem to have adjusted with the viewing process and have started to participate in online tours. (check out our blog on how to set up a virtual tour on your home in the 3rd section: Tips on selling your during the Corona Virus)
The median price on houses has been climbing steadily over the last few years, peaking in the month of March at a little under $299,400.
There has been an increase in buyers getting cold feet and withdrawing, but eager buyers are taking their place.
So it is safe to say that it is still a seller's market in Arizona, but many feel this may change to a Buyers market.
What could happen in the Future: Long Term
Despite the stable conditions now, there will be some effect on the prices of houses in Phoenix, whether it is favorable for the seller or buyer. According to Zillow's home value index for the year (ending in March 31st, 2021), the prices will drop by 0.5% here is their index:
According to Zillow, foreclosures will have on property values in the next couple of years as more homeowners are becoming delinquent on their mortgages. As of now, there are only 0.7 of delinquent mortgages. However, there is 8% of Arizona homeowners that owe more than what their properties are worth.
A rise in short sales is a fair assumption based on these numbers, especially if the coronavirus exacerbates the situation with unemployment rising.
What could happen in the Future: Short Term
So far, there has not been a spike in evictions since President Trump passed his mortgage relief programs. On top of that, an eviction generally takes up to 3 months. Here are some of the short term effects that may happen:
- More Buyers get cold feet and back down
- More Sellers get cold feet and back down
- Material and labor shortages slow down construction
- Buyers are getting nervous despite the current stable conditions.
However, we are not heading into a recession due to a housing market collapse, so there is hope!
Our recomendations to you:
So to recap, we are still in a seller's market. Meaning it is more favorable to sell than buy at the moment. So if you are serious about selling your house, then right now could be the best time to sell, and if you want to buy, try to resist for a few months and see how this market plays out. Just be safe and take the necessary precautions to stop the spread!