Real Estate

Supply Vs. Demand: The Myth Vs. Reality

By Holly Henbest, Realtor

With the rising prices of homes, bidding wars and some homes selling in just a few hours, talk of supply and demand issues continue be the focus of many real estate discussions. When we talk about supply and demand, many people have been assuming the results are due to a situation that is equal parts supply and demand. We keep hearing about Arizona being the number one relocation destination, and so many Californians fleeing to Arizona. That is all true, but the reality is that the data shows that demand is only 10% above normal and the dominant issue right now is supply.

This current situation should be comforting news to anyone who is concerned about a market crash or bubble. Why? The answer lies in the fact that demand can change much more quickly than supply. As we recover from the pandemic and the country returns to a ‘new normal,’ we may find the relocation factor affecting the demand to slow a bit. Although we are seeing population growth and California buyers (as well as buyers from many other locations) come to Arizona, the effect of relocations isn’t so great that we will miss it if it slows down.

On the flip side, history and trends show that supply is slower to react or change. That is good news because the implication is that there won’t be a big drop or sudden change to our situation. One reason supply continues to be an issue is that homeowners may want to move, but they may be hesitant to move because they know it may be hard to find a home they desire. So their home isn’t listed for sale, and the home they may want to buy isn’t listed for sale because other homeowners are also worried about where they will go. Once we start to see less competition from out-of-state buyers, we foresee our next wave of buyers will be the locals who have been sitting on the sidelines and who will affect both supply and demand going forward.

Here is some recent data for March 2020 vs. March 2021, courtesy of The Cromford Report:

• Unit Sales Were Up 29.3% • Sales to Primary Residence Buyers were up 12.7% • Sales to Investors for Rental Properties were up 52.1% • Sales to Investors for Vacation Homes were up 52.1%

As we can infer from this data, primary residence buyers and investors are both buying homes. Sales are up in all categories, but especially by investors capturing the greater percentage increase. This is also comforting news to the stability of our pricing because investors are often cash buyers or put a significant amount down. Although investors are buying homes at record-breaking prices, they immediately have tremendous equity in them. The situation now contrasts to the situation preceding the historical crash when homeowners had lesser equity partly as a result of having little if any equity when the home was purchased with little to nothing down.

The crash is part of our past and hard for a lot of us to forget, but the circumstances now are vastly different.

We hope this data and information is helpful. Do you have a real estate question? Give us a call at 480-2668785.

Holly has been a Desert Ridge resident since 2000 and has been a realtor since 2006. She is the leader of The Henbest Team with Realty One Group. Holly is ranked in the top ½ of 1 percent of Realtors in Arizona and is a Certified Luxury Marketing Expert. She was also ranked #24 in 2019 by the Phoenix Business Journal and recognized by So Scottsdale! magazine as a Real Estate Superstar for 2019.

Emblem at Talinn to Start Construction Next Month; Official Opening in Fall

In 2019, Shea Homes purchased approximately 42 acres of land located at 56th Street and Deer Valley Road. They are currently slated to build 141 single family homes in this new location. The homes will range in size from 2,553 to 3,744 square feet. Floorplans will be similar to those currently available at Emblem at Aloravita in Peoria. The community is planned to have amenities such as a large community park, pool and recreation center. The grand opening is slated for fall 2021.

“Our team is working hard to meet the increasing demand for new homes in the Valley,” says Shea Homes Arizona Vice President of Sales and Marketing Ken Peterson. “But we don’t close on a land deal until we are certain we’ve found

the right spot. Talinn at Desert Ridge will bring some of our most popular Shea floorplans to the highly coveted Desert Ridge area. We have already seen that prospective homebuyers are pretty excited about this new Phoenix community with more than 1,500 on the interest list.”

Shea Homes will be hosting virtual information sessions this month and then will offer limited pre-sale opportunities shortly thereafter, according to a company spokesperson. Construction is expected to start in June and will be completed by the fall.

Shea Homes is one of the largest private homebuilders in the nation and, since its founding in 1968, it has built more than 100,000 homes. For more information about Shea Homes and its communities, visit the company’s website at SheaHomes.com.

ACROSS

1. Build a collection 6. Economic measure acronym 9. *Beverly Goldberg’s schmoopie 13. Use an Épée 14. Neither here ____ there 15. Tall ancient monument 16. Daisy-like bloom 17. Much of it about nothing? 18. Commotions 19. *She’s ‘Bow’ to Dre in TV sitcom “Blackish” 21. *Mother to Jo, Meg, Amy and Beth March in novel and movie 23. Before tac 24. Ripped 25. Part of Super Bowl entertainment, pl. 28. Homesteader’s measure 30. *”Game of Thrones” Lannister and mother to Joffrey, Myrcella and Tommen 35. Douses 37. Adjutant 39. Article of faith 40. Genuflecting joint 41. *TV mother to Alexis and David, “friend” to Jocelyn Schitt 43. “Will be,” as sung by Doris Day 44. Perform in a play 46. Load sixteen tons, e.g. 47. Peacock’s pride 48. *Mowgli’s adoptive mother 50. Apartment 52. Skeleton in a lock 53. Part of a jousting outfit 55. Spelling competition 57. *Mother to Carlton in “The Fresh Prince of Bel-Air” 60. “Well, I’m a-standin’ on a corner in ___, Arizona,” from the Eagles “Take it Easy” 64. Country’s LeAnn ____ 65. Hoover’s agency acronym 67. Piano practice piece, e.g. 68. Church song 69. What Usain Bolt did 70. Poisonous substance 71. *Wife to Papa, mother to Baby 72. Sum it up 73. Go on a buying spree

DOWN

1. Way, way off 2. ____ Verde National Park 3. Naysayer’s favorite prefix? 4. What bloodhound is after 5. Croatia’s neighbor 6. Nibble away 7. Affirmative action 8. Movie trailer, e.g. 9. Elementary particle 10. *Claire Dunphy and Mitchell Pritchett’s mother 11. Soothing lotion ingredient 12. Bell and Barker, e.g. 15. Christopher Kimball’s “Milk ____” 20. ____’s razor 22. Part of a circle 24. Tiresome 25. Questioner 26. *”Mamma Mia!” mamma 27. Do this or forever hold your peace 29. ‘80s band “Quiet ____” 31. Catch one’s breath 32. ____ a peak 33. Bone-chilling 34. Europe’s “boot” 36. Short for seconds 38. *She played Ricky Schroder’s stepmom on “Silver Spoons” 42. Defendant’s excuse 45. Religious belief 49. ____ Khan 51. Plural of #39 Across 54. Below, prefix 56. Impede 57. “Everywhere you want to be” credit card 58. Muslim holy man 59. Plural of velum 60. *Ellen, Scarlett’s mother in “Gone with the ____” 61. Like the best accommodations 62. War god in Norse mythology 63. Make one’s way 64. Dashboard acronym 66. *Kunis, Hahn and Bell as “____ Moms”

SOLUTION ON PAGE 29.

I’m not just a REAL ESTATE AGENT I’m also your Neighbor CALL ME to get your Home Sold

Michelle Noma, Realtor

KELLER WILLIAMS ARIZONA REALTY 480-639-8502

Michelle@MichelleNoma.com DESERTRIDGELIVING.COM

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