A client texted me last week. All the for sale signs in her neighborhood were making her nervous. It was giving her Great Recession flashbacks.
I told her the truth. Inventory is up significantly, we have roughly three times the listings we had a few years ago, and yes, the market has shifted. It’s taking longer for homes to sell and sellers have less negotiating power than a few years ago.
We all carry a little PTSD from 2008. That’s valid. This just isn’t 2008.
The biggest difference is equity. Nearly 50% of Arizona homeowners hold more than $250,000 in equity today. That safety net didn’t exist back then. When you have equity, you have options. You can price it right and walk away whole.
Regarding foreclosures—because I know that’s the fear underneath the fear— yes, activity is up. But bank-owned properties and short sales made up just 1.1% of all Phoenix sales last month. At the peak of the Great Recession, Phoenix had over 10,000 homes in pre-foreclosure in a single month. Most of today’s distressed properties are investors who overpaid in 2022, not the homeowners living in these neighborhoods. And the loans being made today are nothing like the risky adjustable rate free-for-all that fueled the collapse back then.
Here’s what I’m actually seeing: my last three listings, all well-prepped, staged, and priced right, went under contract opening weekend. The well-positioned homes are still moving. The ones sitting are the ones that aren’t ready or aren’t priced competitively.
Real estate rewards time in the market, not timing the market. The people who lost the most in 2008 weren’t the ones who held. They were the ones who panicked and sold at the bottom. I would know, because I was one of them.
I bought my first home at 22 years old in 2006 in the middle of farm fields in Queen Creek. With just an offer letter from my first employer and not a single dollar to my name, I qualified for a $300,000 home. That home was worth $100,000 three years later, so I cut my losses and short sold it. Had I kept that house, it would be worth over $500,000 today and cash flowing as a rental. Real estate is just like the stock market. You don’t sell when the market isn’t in your favor.
If someone in your world is watching those signs go up and getting nervous, send them my way. I’ve been through the bottom, and I know how to navigate this.
