As each week passes we are beginning to see the impact of COVID-19 start to flatten out as it relates to real estate. We are by no means out of the woods, but I’m feeling much more optimistic that the housing market will weather this storm with limited impact to home values. This month I’m not going to go in depth with market stats- they are all down which is expected and not all that fun to read about. Instead, I’m going to go through the key reasons to believe that the Arizona housing market will return with gusto!

Reason #1: Even though demand has waned it’s still higher than the available supply in Arizona. At the moment we are still in a seller’s market where home prices typically appreciate, but likely at lower levels till we get people back out and buying homes as usual. We may see the number of transactions fall as indicated by last month’s numbers, but that doesn’t directly correlate to a fall in home prices. 

Reason #2: The government just simply isn’t going to allow a housing crisis to happen. They have imposed regulations that’s going to make it very difficult for lenders to foreclose on homes due to missed payments. Federally backed loans, which is about 70% of all mortgages, are now required to renegotiate terms with homeowners who have defaulted or been granted forbearance. Foreclosures drag down home values as we saw in the recovery from the 2008 bubble. This will not happen again. 

Reason #3: Arizona has done a rockstar job attracting companies to our market to diversify our employment base. As of last month 290 companies were still planning to move forward with plans of opening offices or headquarters in the greater Phoenix area. That equates to over 160,000 jobs projected to be added over the next two years alone. People who may have permanently lost their jobs due to COVID will be able to find new jobs in the near future. 

Reason #4: People need a place to live regardless of what’s going on the world. I am very pleasantly surprised to see how many people are still moving forward with planned purchases and even some moving up their timelines. It seems being stuck in your rental apartment for 2 months is a great motivator to purchase a home of your own. Additionally, people were already moving here in record numbers and now there is a strong motivation to move out of more densely populated metropolitans into less saturated areas. The Greater Phoenix area is poised to capture the attention of many people looking to reduce future risk of rapid disease spread. 

In closing, I don’t want this to seem like I’m just viewing with rose colored glasses. I’m keenly aware that we have some obstacles to navigate as we make our way through the pandemic. I will be covering a more indepth look at the overall housing market in greater detail in my Arizona Market Update Happy Hour scheduled for May 13th at 6pm. I hope you’ll join me by registering for the webinar here. 

Lindsay Fricks, Helping you, your family and friends Live & Love in Arizona!