Real Estate Report

Real Estate Report

Buyers are ‘cautiously’ searching for homes By Shelley Sakala O ne of the residual effects of the COVID-19 health crisis has been a pause in the real estate market—not an uptick or a downturn, but a pause. Homeowners and home buyers are unsure of what exactly to do. On the one hand, there is uncertainty in the job market. On the other hand, historically low interest rates are creating excellent buying opportunities.

At the first sign of economic trouble, homeowners tend to refer to the real estate bubble of 2008 as a guide. Even though that was more than a decade ago, many people are just now climbing back into the positive column with their home values. A big difference, however, between the 2008 economic downturn and the one we’re in now is that the current economic challenges are not driven by real estate. There may be a net effect on the housing market—but unlike 12 years ago, real estate did not cause this problem. Here are five things that happened during the mortgage crisis that are not happening now: 1. Banks are not doing the same risky and irresponsible loans. Back in 2008 there were 3.1 million foreclosures in the United States. Banks are not eager to return to the business of home ownership. 2. The growth in 2020 home values has been slow and steady—not propped up by new investors flooding the marketplace and driving up the demand. 3. Despite current economic challenges, home prices aren’t dropping. Average price per square foot in Phoenix in February was $185, up from $184 the previous year. While it’s certainly worth keeping an eye on home prices as we navigate the COVID-19 crisis, average home values are presently holding. 4. The federal government’s decision to launch economic stimulus and recovery programs relatively early in this health crisis has helped homeowners stay current on mortgages. Back in 2008, the recovery programs came far too late for many people. The economic damage was already done. 5. Recovery legislation in 2008 was specifically designed to assist the homeowner. The current recovery legislation is designed to keep Americans working and includes major assistance for small-business owners.

We’ve spoken with other Realtors to see what they’re experiencing in the market. Local Realtor Andy Benoit with HomeSmart shared an interesting observation: “I currently have a listing in 85085 that has experienced a drop in the amount of showings. That same listing, however, continues to rank high in viewings across all the real estate search engine sites, which tells me that buyers, while still interested, are keeping their fingers on the pulse of the market.”

But are buyers nervous?

“I think ‘cautious’ is a better word,” Benoit says. “Before social distancing, they were running to find a new house—and now they are on a slow walk.”