Caution! Home buyers! Possible price correction coming to Phoenix! (Scottsdale: days on market, lenders)

[asufan]

I have noticed a few bulk sales going on with certain condo's right now from institutional investors, not a bunch though. Currently a lack of much inventory.

[AndroidAZ]

There's an article on AZCentral talking about why there won't be a housing price crash, unfortunately it's behind a paywall.

Does anyone have access and can give us the gist of this article?

https://www.azcentral.com/story/mone...ts/5114064002/

I personally don't think there will be a housing crash, as favorable trends such as people working remotely expands and people escaping from high cost of living areas to cheaper areas like Phoenix continue, our stability in terms of no natural disasters, great weather most of the year, and the business friendly climate here attracts more employers over time.

[cgl77]

Metro Phoenix fares better in economic downturns not led by the real estate market, but that doesn’t mean the Valley’s housing market will be unscathed by the COVID-19 crisis.

Listings have climbed 20% in the past few weeks, which could indicate that homeowners struggling financially are hoping to get out from under mortgages or short-term rental owners who don't have customers want to sell.

The number of homes for sale is still 32% below the same time last year, said Arizona Housing expert Tina Tamboer of the Cromford Report.

Veteran Arizona economist Elliott Pollack and others expect the Phoenix housing market, like pretty much every other sector, to hunker down for the coming months.

“People aren’t moving now and that means they aren’t buying homes,” Pollack said. “’Phoenix’s strong population growth was driving the housing market. That’s over until this crisis is over.”Preliminary reports show home sales and prices climbed in March, though both are lagging indicators because the deals were struck at least a month ago, before the coronavirus shutdowns began.

Pending sales show the median home price could hit a record $301,000 for March, according to pending sales tracked by the Arizona Regional Multiple Listing Service.

Other indicators of the market's response to the pandemic include:

Most ibuyers such as Opendoor that use technology to make instant offers on homes have stopped buying houses due to the uncertainty with the health and economic crisis.
Potential buyers are still looking at Valley homes for sale because virtual tour views are jumping.
To close sales, title agencies are offering drive-through service for homebuyers.
More Airbnb or short-term rental owners who don’t have customers now are trying to sell homes in the Valley, though the exact number is tough to track, Tamboer said.
Demand for new homes is falling and will continue to drop into this year’s third quarter, according to Belfiore Real Estate Consulting.
“We anticipate this fall-off to be temporary, with the market leveling off in the fourth quarter and bursting upward into the first quarter 2021,” Jim Belfiore said. “Heading into mid-March, the new home market was better than during any period in the last 15 years.”

What to watch in housing
If home prices are going to fall, the first step in that direction would be seeing sellers drop their listing prices. "That hasn't happened," Tamboer said.

The median listing price of a metro Phoenix home hit $315,000 in February, according The Information Market, owned by ARMLS. Listing price and sales numbers for March will be out in a few weeks.

A housing market crash led the economy into the Great Recession in 2008. Speculators and subprime loans backed by Wall Street led to a 50% spike in metro Phoenix home prices during 2005 and 2006, and then a record number of foreclosures from 2008 to 2012.

Phoenix-area home prices climbed steadily between 7% and 10% during the past few years, and foreclosures in February were at the lowest level since 2005.

Housing analysts don’t see any similarities between the housing market crash and now.

“The sooner stimulus money gets in peoples’ pockets, the sooner the economy will recover,” Pollack said.

[asufan]

Almost everything is getting multiple offers right now in the Chandler area and selling above list price. I call it an "artificial bump" due to people not wanting to list properties, which creates the shortage. I'm sure once the virus is under control and more properties go on the market, we'll really see where we are.

[Sno0909]

Originally Posted by asufan

Almost everything is getting multiple offers right now in the Chandler area and selling above list price. I call it an "artificial bump" due to people not wanting to list properties, which creates the shortage. I'm sure once the virus is under control and more properties go on the market, we'll really see where we are.

What area and price point are you looking at? My client is looking to buy $700k+ but is on hold right now due to everything going on. So we've been keeping a close eye on Ocotillo and Fulton Ranch. Just the other day, a beautiful house was reduced from $639k down to $599k. We aren't seeing that much activity at these price points.

[john3232]

Originally Posted by cgl77

Metro Phoenix fares better in economic downturns not led by the real estate market, but that doesn’t mean the Valley’s housing market will be unscathed by the COVID-19 crisis.

Listings have climbed 20% in the past few weeks, which could indicate that homeowners struggling financially are hoping to get out from under mortgages or short-term rental owners who don't have customers want to sell.

The number of homes for sale is still 32% below the same time last year, said Arizona Housing expert Tina Tamboer of the Cromford Report.

Veteran Arizona economist Elliott Pollack and others expect the Phoenix housing market, like pretty much every other sector, to hunker down for the coming months.

“People aren’t moving now and that means they aren’t buying homes,” Pollack said. “’Phoenix’s strong population growth was driving the housing market. That’s over until this crisis is over.”Preliminary reports show home sales and prices climbed in March, though both are lagging indicators because the deals were struck at least a month ago, before the coronavirus shutdowns began.

Pending sales show the median home price could hit a record $301,000 for March, according to pending sales tracked by the Arizona Regional Multiple Listing Service.

Other indicators of the market's response to the pandemic include:

Most ibuyers such as Opendoor that use technology to make instant offers on homes have stopped buying houses due to the uncertainty with the health and economic crisis.
Potential buyers are still looking at Valley homes for sale because virtual tour views are jumping.
To close sales, title agencies are offering drive-through service for homebuyers.
More Airbnb or short-term rental owners who don’t have customers now are trying to sell homes in the Valley, though the exact number is tough to track, Tamboer said.
Demand for new homes is falling and will continue to drop into this year’s third quarter, according to Belfiore Real Estate Consulting.
“We anticipate this fall-off to be temporary, with the market leveling off in the fourth quarter and bursting upward into the first quarter 2021,” Jim Belfiore said. “Heading into mid-March, the new home market was better than during any period in the last 15 years.”

What to watch in housing
If home prices are going to fall, the first step in that direction would be seeing sellers drop their listing prices. "That hasn't happened," Tamboer said.

The median listing price of a metro Phoenix home hit $315,000 in February, according The Information Market, owned by ARMLS. Listing price and sales numbers for March will be out in a few weeks.

A housing market crash led the economy into the Great Recession in 2008. Speculators and subprime loans backed by Wall Street led to a 50% spike in metro Phoenix home prices during 2005 and 2006, and then a record number of foreclosures from 2008 to 2012.

Phoenix-area home prices climbed steadily between 7% and 10% during the past few years, and foreclosures in February were at the lowest level since 2005.

Housing analysts don’t see any similarities between the housing market crash and now.

“The sooner stimulus money gets in peoples’ pockets, the sooner the economy will recover,” Pollack said.

With regards to rentals that's what I'm seeing. I just found a tenant for a Gilbert rental starting May 1st.

Usually for a Gilbert property the phone rings off the hook... but not this time.

[asufan]

Originally Posted by Sno0909

What area and price point are you looking at? My client is looking to buy $700k+ but is on hold right now due to everything going on. So we've been keeping a close eye on Ocotillo and Fulton Ranch. Just the other day, a beautiful house was reduced from $639k down to $599k. We aren't seeing that much activity at these price points.

Investment type properties, so in the 290-425 range in Chandler and Gilbert. I live in the area you're looking and there's zero listings in my little subdivision which is in the mid-800's per the last 6 months or so of sales, I'd be interested to see what the market says if one pops on the market now.

[Solere]

The consensus of most economists is that the United States is headed toward a deep recession or depression soon. Why wouldn't there naturally be a decline in housing prices. If there is 30% unemployment, who will be purchasing houses from those unemployed homeowners who might have to sell their house to sustain themselves financially? I doubt if "flippers" will be successful garnering a profit in a down economy. The financial portfolio of small time real estate investors who own one or two "flip" houses or rentals has probably undergone a huge decline and possibly their renters are asking for rent relief. So who is left to purchase the impending multitude of inventory. Mega REITS and private equity firms? A solo investor who has all her/his money in treasuries/cd's who has been insulated from the stock market decline?

[asufan]

Originally Posted by Happs

The consensus of most economists is that the United States is headed toward a deep recession or depression soon. Why wouldn't there naturally be a decline in housing prices. If there is 30% unemployment, who will be purchasing houses from those unemployed homeowners who might have to sell their house to sustain themselves financially? I doubt if "flippers" will be successful garnering a profit in a down economy. The financial portfolio of small time real estate investors who own one or two "flip" houses or rentals has probably undergone a huge decline and possibly their renters are asking for rent relief. So who is left to purchase the impending multitude of inventory. Mega REITS and private equity firms? A solo investor who has all her/his money in treasuries/cd's who has been insulated from the stock market decline?

A down market is exactly when you make the money. You make money by getting a good deal.

[Solere]

Originally Posted by asufan

A down market is exactly when you make the money. You make money by getting a good deal.

Correct, but with high unemployment and massive stock market declines, who will have the money to invest? Certainly, not your casual "flipper" or someone who owns a rental to supplement their income, who meanwhile already has a loan on their primary residence, which has declined in market value.