Housing market (Seller) in Phoenix (Scottsdale, Sun City: sales, renters, loft)
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my couple of realtor friends say the phoenix market is pretty much the same as it has been for awhile and no deals have collapsed or been canceled for them, and prices are holding steady..
not really scientific but it mirrors what others in this thread are saying..this market is still one of the best int eh US, with no signs of things changing..Now, what these builders, that are still putting up thousands of new homes might do is anyones guess, but existing homes appear to remain stable
my couple of realtor friends say the phoenix market is pretty much the same as it has been for awhile and no deals have collapsed or been canceled for them, and prices are holding steady..
not really scientific but it mirrors what others in this thread are saying..this market is still one of the best int eh US, with no signs of things changing..Now, what these builders, that are still putting up thousands of new homes might do is anyones guess, but existing homes appear to remain stable
The number of listings has dropped off significantly. So, while there are still buyers out there, their options are limited. The whole thing is murky right now.
To the OP: if you have to sell, list your home. Simple as that.
No one actually knows with 100% certainty when the "peak" will be; why they call them projections. That's the frustration when attempting to make future plans. Plain and simple: All bets are off right now.
In regard to purchasing, I know plenty of affluent shoppers still buying expensive assets currently but most expect a deal because there's blood in the water. And not just investors; common sense that all buyers would understand this. There simply isn't the disposable cash there was and consumer confidence is down.
OP, lots of home buyers in the 900-1M range have watched their portfolios decimated over the last few weeks. Until they see a glimmer of hope in their financial future I suspect they will watch and wait, no matter how much "free time" they have right now.
It certainly doesn't help when the agenda-driven media props some idiot in front of a camera spouting that we could be in a "lockdown" for up to 18 months. How utterly irresponsible. What is the point in making that kind of pie-in-the-sky proclamation?
As a Realtor who mostly works the East Valley, I can tell you the market has stayed very strong in this last month. I did have one buyer cancel, 3 days prior to closing, on one of my listings when the stay at home order came thru. Put the home back on the market and it sold 3 days later. I've written a number of offers on homes in all price ranges, but maybe not as high at $900K, in the last few weeks, and have dealt with multiple offers on all of them. Still writing in escalation clauses too.
Re the Cromford Report, yes you do have to pay for it. The lastest info I got on it was to expect the market to stay strong. This is what I shared with a lot of my clients in mid March:
Getting a lot of questions on what I think the market is going to do. Read this. They have been great predictors in the past
Real Estate Market Update - Cromford March 2020
Here are some words written by ASU economist Michael Orr on the market outlook for real estate in Arizona. It’s a pretty interesting read, and explains the differences between the housing collapse 10-15 years ago and what’s going on today:
March 18 - A number of people seem to assume that we are heading for a recession and that home prices will fall. The first assumption is quite reasonable. The second assumption is based on fear and has little analytical data to back it up. Obviously anything can happen in a uncertain and disrupted world, but a fall in home prices is still looking very unlikely from today's numbers.
In 2005 the housing industry started to sicken because homes were being used as speculative commodities not for places to live. In 2005 I met a man in his early 20s who owned 12 homes in the Phoenix area, all with no occupants. How had he been able to buy them? 100% loans from unscrupulous lenders who went bust between 2007 and 2010. The housing industry (and more particularly the lending industry within it) was the cause of the 2008 recession. Phoenix was a hot spot for the cause of the problem, as was Las Vegas.
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.
Because the virus has not been contained yet, except in several parts of Southeast Asia, we are likely to see a lot of people out of work. We do not yet know how long it will take to get control of the pandemic in Arizona, but many people may be out of work for quite some time. These people are more likely to be renters rather than homeowners. Landlords may find it much harder to collect rents and the yields from their portfolios are likely to fall. Some may decide to evict tenants and sell their properties. At the moment the extra supply would be welcomed and receive multiple offers, even in these troubled times. The evicted tenants still exist and therefore still represent demand for shelter of some sort. There will be hardship, but not a flood of homes with no-one to live in them.
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.
All the indicators for the Central Arizona housing market remain very healthy at the moment and we will report any change as soon as we spot one. There is no cause for panic and if you are delaying a purchase because you think the price will come down, you are probably making a poor decision.
Michael Orr
The Cromford Report.
As a Realtor who mostly works the East Valley, I can tell you the market has stayed very strong in this last month. I did have one buyer cancel, 3 days prior to closing, on one of my listings when the stay at home order came thru. Put the home back on the market and it sold 3 days later. I've written a number of offers on homes in all price ranges, but maybe not as high at $900K, in the last few weeks, and have dealt with multiple offers on all of them. Still writing in escalation clauses too.
Re the Cromford Report, yes you do have to pay for it. The lastest info I got on it was to expect the market to stay strong. This is what I shared with a lot of my clients in mid March:
Getting a lot of questions on what I think the market is going to do. Read this. They have been great predictors in the past
Real Estate Market Update - Cromford March 2020
Here are some words written by ASU economist Michael Orr on the market outlook for real estate in Arizona. It’s a pretty interesting read, and explains the differences between the housing collapse 10-15 years ago and what’s going on today:
March 18 - A number of people seem to assume that we are heading for a recession and that home prices will fall. The first assumption is quite reasonable. The second assumption is based on fear and has little analytical data to back it up. Obviously anything can happen in a uncertain and disrupted world, but a fall in home prices is still looking very unlikely from today's numbers.
In 2005 the housing industry started to sicken because homes were being used as speculative commodities not for places to live. In 2005 I met a man in his early 20s who owned 12 homes in the Phoenix area, all with no occupants. How had he been able to buy them? 100% loans from unscrupulous lenders who went bust between 2007 and 2010. The housing industry (and more particularly the lending industry within it) was the cause of the 2008 recession. Phoenix was a hot spot for the cause of the problem, as was Las Vegas.
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.
Because the virus has not been contained yet, except in several parts of Southeast Asia, we are likely to see a lot of people out of work. We do not yet know how long it will take to get control of the pandemic in Arizona, but many people may be out of work for quite some time. These people are more likely to be renters rather than homeowners. Landlords may find it much harder to collect rents and the yields from their portfolios are likely to fall. Some may decide to evict tenants and sell their properties. At the moment the extra supply would be welcomed and receive multiple offers, even in these troubled times. The evicted tenants still exist and therefore still represent demand for shelter of some sort. There will be hardship, but not a flood of homes with no-one to live in them.
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.
All the indicators for the Central Arizona housing market remain very healthy at the moment and we will report any change as soon as we spot one. There is no cause for panic and if you are delaying a purchase because you think the price will come down, you are probably making a poor decision.
Michael Orr
The Cromford Report.
I remember the same "it can't happen here" tune in the Cromford Report in about 2006. Then several years of it will be back any day now. His remark that people out of work are mostly renters so nothing to see there is truly out of touch. Many professional types are in families with more than one income. The other income is retail and other services. Small business owners are being destroyed. Many, many homeowners live paycheck to paycheck too. Maybe not where Orr hangs out, but in much of this metro. Reading this it won't happen to us sounds a lot like the many countries of the world that thought COVID-19 would never reach their borders.
The fact is we are going into a recession. Maybe even a depression. It will take months to claw back to where we were, sorting through the foreclosures, bankruptcies and staggering debt people are taking on to defer rent and mortgage payments. And COVID is not going away. No one is immune but the relative handful that have it now. If it does subside, it will return again and again until we have a vaccine or 200 million or so Americans get it. Migration trends will adjust and that means fewer people leaving their jobs and heading for Phoenix. I just don't see a lot of reason for optimism about the economy in general or housing in the short run.
I'd love to be wrong, but as I said, we have heard this song before.
I remember the same "it can't happen here" tune in the Cromford Report in about 2006. Then several years of it will be back any day now. His remark that people out of work are mostly renters so nothing to see there is truly out of touch. Many professional types are in families with more than one income. The other income is retail and other services. Small business owners are being destroyed. Many, many homeowners live paycheck to paycheck too. Maybe not where Orr hangs out, but in much of this metro. Reading this it won't happen to us sounds a lot like the many countries of the world that thought COVID-19 would never reach their borders.
The fact is we are going into a recession. Maybe even a depression. It will take months to claw back to where we were, sorting through the foreclosures, bankruptcies and staggering debt people are taking on to defer rent and mortgage payments. And COVID is not going away. No one is immune but the relative handful that have it now. If it does subside, it will return again and again until we have a vaccine or 200 million or so Americans get it. Migration trends will adjust and that means fewer people leaving their jobs and heading for Phoenix. I just don't see a lot of reason for optimism about the economy in general or housing in the short run.
I'd love to be wrong, but as I said, we have heard this song before.
Yep. Plus who is going go be holding the bag when renters don't pay, landlords can't pay and mortgage lenders can't stay afloat? No to mention the lack of economic activity (even if it recovers fairly soon) isn't going to be good.
Then look at how money is thrown at these issues.
I'm not saying I know what will happen, but these are serious issues.
Once it started to happen, it happened rapidly..kind of like musical chairs, with few chairs and lots of people circling. One day, an analyst from Washington Mutual was on CNBC stating it is only 10% of the sub primes, which were 7%, so .7% of homeowners were in trouble. A few short months later, prices were dropping more than 1% per day, and WM stock was worth about two cents per share. I recall being scolded by a realtor in Nova, informing him that you could now get a home in Gainesville, VA under 300k..he just brushed it off like a rare exception and it didn't even have granite countertops, lol. Six months later, there were thousands of homes under 200k, in one of the most stable housing markets on earth.
Just not seeing the softness, but if we are in a nine inning game, we haven't seen the first pitch, yet, only the Boeing plane with engine trouble during the flyover. The foreclosure process is quick in AZ, and I would question the Constitutionality of a court imposed moratorium on foreclosures. The deed of trust specifically states what will happen if the mortgage is not paid, and it was signed by all parties. I don't think the banks are dumb enough to have them all chopped up, and fragmented like they did before, giving the defaulters more time. Business is quite good for many, while others have been decimated and will never be the same. Saudi Arabia bought an 8% stake in Carnival Cruise Lines the other day..450 million worth, or so. The Saudis are known for coming in after bloodshed, and usually making some pretty good buys.
Last edited by Hal Roach; 04-12-2020 at 05:59 AM..
I remember the same "it can't happen here" tune in the Cromford Report in about 2006. Then several years of it will be back any day now.
Actually, I read his words differently. 1. We are probably headed for a recession (numbers are not out so it's an educated guess). 2. There is going to be some pain. But from the number as of March 18th are not showing it because things are selling fast. Then he sets up who he thinks is going to take the brunt of the fall. And that equity is currently the buffer which would slow down a possible collapse. I think that's fair. Then he goes on to say if the numbers change (and it might), he will report accordingly.
Here are his exact words: "A number of people seem to assume that we are heading for a recession and that home prices will fall. The first assumption is quite reasonable. The second assumption is based on fear and has little analytical data to back it up. Obviously anything can happen in an uncertain and disrupted world, but a fall in home prices is still looking very unlikely from today's numbers.
Evidently, people investing in the stock market are shrugging off a lot of this gloom-and-doom as well. I think we would need another pretty large shoe to drop before the economy goes into a depression. Like it or not, the flood gates are going to re-open. I do think a whole lot of people are going to change their purchasing behavior over the next 12 months. So there will be business winners and losers. That doesn't mean AZ housing is going to collapse.
Quote:
Originally Posted by AZPam
Here are some words written by ASU economist Michael Orr on the market outlook for real estate in Arizona.
FYI. Mike left ASU back in 2006. Still, I consider him the expert of experts in the PHX area. I credit him giving me the courage to buy my home at around $50 a square foot in early 2011. I digested every word he wrote. Cha Ching!
Actually, I read his words differently. 1. We are probably headed for a recession (numbers are not out so it's an educated guess). 2. There is going to be some pain. But from the number as of March 18th are not showing it because things are selling fast. Then he sets up who he thinks is going to take the brunt of the fall. And that equity is currently the buffer which would slow down a possible collapse. I think that's fair. Then he goes on to say if the numbers change (and it might), he will report accordingly.
Here are his exact words: "A number of people seem to assume that we are heading for a recession and that home prices will fall. The first assumption is quite reasonable. The second assumption is based on fear and has little analytical data to back it up. Obviously anything can happen in an uncertain and disrupted world, but a fall in home prices is still looking very unlikely from today's numbers.
Evidently, people investing in the stock market are shrugging off a lot of this gloom-and-doom as well. I think we would need another pretty large shoe to drop before the economy goes into a depression. Like it or not, the flood gates are going to re-open. I do think a whole lot of people are going to change their purchasing behavior over the next 12 months. So there will be business winners and losers. That doesn't mean AZ housing is going to collapse.
FYI. Mike left ASU back in 2006. Still, I consider him the expert of experts in the PHX area. I credit him giving me the courage to buy my home at around $50 a square foot in early 2011. I digested every word he wrote. Cha Ching!
But, would be have greenlighted a purchase at 175 psf in early 2008? By 2011, multiple offers were the norm.
But, would be have greenlighted a purchase at 175 psf in early 2008? By 2011, multiple offers were the norm.
No, I don't think so. There was the term "catch a falling knife" used to describe people buying homes while prices were still declining. By 2007 it was clear to most people it wasn't a good time to buy
I bought a short-sale in which the owner in 2007 paid 270 grand. (New Chandler build -2400 sq. ft. 4 bed 2.5 bath)
But the owner gave back the keys and by the end of 2010 the bank had it listed at $160,000. (I picked it up for 170 grand)
Today maybe 330,000
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Still, I consider him the expert of experts in the PHX area. I credit him giving me the courage to buy my home at around $50 a square foot in early 2011. I digested every word he wrote. Cha Ching!
