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What Phoenix can expect from the 2020/21 housing market
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The January and February housing statistics took everyone by surprise, especially the people with a big leap in sales and price. This was particularly evident in Boston, New York, Atlanta, Dallas, and so many other major centers. Most markets across the country have suffered severely due to the Coronavirus and the shutdown orders. Still, there has been activity in prices, and evidence indicated a declining trend in March and could hit rock bottom in the spring.
In January, nothing could touch the redhot Arizona market, not even the rise in the interest rates.
“The modest uptick in mortgage rates over the last several months reflects declining recession fears and a more sanguine outlook for the global economy,” says Sam Khater, chief economist for Freddie Mac. “Due to the improved economic outlook, purchase mortgage applications rose 15 percent over the same period a year ago, the second-highest weekly increase in the last two years. Given the important role residential real estate plays in the economy, the steady improvement of the housing market is a reassuring sign that the economy is on the solid ground heading into 2020.”
PHOENIX HOUSING MARKET 2020/21 WHAT TO EXPECT MARKET OUTLOOK
The renewed confidence in the Arizona housing market has most of the experts in the industry bullish on Arizona’s residential housing market.
Right, it seems that not even the Coronavirus can slow down the Greater Phoenix housing market. Housing statistics show that for every 100 active listings in Arizona Regional MLS, there are about 111 more that are already under contract. From these statistics, it shows that the Greater Phoenix housing market is a frenzy, and we are just in March. Going forward, we should expect a rather hot market. Nevertheless, that only goes as far as May without relief as buyers are always in demand for housing during the spring season.
Going further down to the southeast, the situation changes dramatically, and the same can be said of the West Valley and the North Phoenix and all the areas where prices land between $175-$300K, and there is a reason for this. The average cost for a 1,500-2,000 SF home now sits at $331K, and the price continues to rise, and that can be quite alarming, considering that it was $324K at a peak in 2006. Still, contrary to popular belief, today’s housing is much more affordable thanks to the interest rates. For instance, going by what was there in the spring of 2006, with an average of 6.51%, the monthly principal and interest payment on a 30-year fixed loan with a 10% down was $1,854. However, today, with an average of 3.45%, the same home is $1,331, which means a person will be able to save about $523 a more. Over the last 16 months, despite the prices have risen 9.4% for a median-sized home, the monthly payment dropped about $112 a month.
Unlike the buyers, there is not so much we can say about the sellers under 500k. The demand is so high that their homes could be going even before we finish saying it. For buyers and sellers under the 500k margin, there is a stark gap in the supply-demand economics, and it does not ease up until you go up to the 600k bracket. And if you think that this is a safe have for buyers or sellers, you’re wrong. How do you compete with wellpriced, updated, move-in ready homes? Well, that is the situation for most sellers in places like North Scottsdale, Paradise Valley, the Camelback Corridor, and Downtown Phoenix
In light of the pandemic, you will be amazed that the luxury market is still doing very well. However, that is not to say that sellers should expect anything abruptly, as seen in the rest of the markets. There are about 522 properties under contract over $1M, up a whopping 60% over the last year around this same time.
So, what do you think the future holds for the Phoenix housing market? Well, let us know. To get more up to date information about the phoenix market or to see some properties for sale in the area, or if you want to invest in the property market in Phoenix, talk to Yvonne McFadden today. Yvonne is a veteran in the real estate industry. Her business has been extensive over 30 plus years, with clients ranging from all walks of life.
Interestingly, she recently added a foreign presence by becoming licensed in Dubai. Therefore, you can trust the quality of work relationships you will get from Yvonne. Look no further. Yvonne is your agent; give her a call today or go to https://thepowerisnow.com/ vipagentsservices/yvonne-mcfadden/ to learn more about Yvonne.
Sources & Work Cited
https://www.mountainparkranchrealestate.com/phoenixreal-estate-market-report-march-2020/ https://azbigmedia.com/real-estate/residential-realestate/housing-market-in-2020-heres-what-to-expect-inarizona/ https://gordcollins.com/real-estate/us-housing-marketforecast/
