It’s no surprise that the COVID-19 outbreak is significantly impacting the economy. As a result, it’s sparking changes across most industries, including the U.S. housing market. Residential real estate is responding to COVID-19 in multiple ways. While we are seeing setbacks in some markets comparable to the Great Recession, this is not the case for the Phoenix market. Yes, the Valley’s residential real estate market is experiencing changes in response to the coronavirus, but some of these changes are positive.
Some real estate professionals are saying that the pandemic is generating market changes that needed to happen. The residential real estate market is almost “re-setting” itself, according to Valley Realtor, Lance Billingsley. Before the COVID-19 outbreak struck the nation, the Phoenix residential housing market was the hottest in the country. But we had record lows in inventory with just 10,000 homes available for sale in a city of 7 million people. Low inventory means limited options for buyers, competing offers and higher prices. In other words, if you were in the market to purchase during the first three months of 2020, it was challenging to find available homes, especially under $400,000.
In the first few weeks of April 2020, home listings climbed by approximately 20% according to the ARMLS New Residential Listings Report. The increase is evidence of Valley homeowners facing financial struggles, looking to get out from under mortgages and those looking to take advantage of real estate gains. The number of homes on the market has grown from 10,000 to more than 14,000. While it is a significant change, the number of available homes for sale is still 32% lower than the inventoryof homes available this time last year according to Arizona Housing expert Tina Tamboer of the Cromford Report. Essentially, the home inventory adjustment is moving in the right direction.
Stabilizing the Phoenix Market
Pre-pandemic, Phoenix home prices were at an all-time high. Just last month median home prices climbed to $299,400, compared to April 2018 when the Phoenix median price was $255,000 according to The Information Market by ARMLS. As more homes are available for sale, the impact on the market’s home prices is expected to stabilize, which isn’t necessarily a bad thing. While homeowners love seeing home values appreciate, one of the big attractions for people moving to the area (in addition to the weather) is the affordable housing market. If inventory remains low, it can ultimately impede growth.
Safe selling practices
When Governor Ducey instituted the current shelter in place order in Arizona, Realtors needed to rethink how they were going to work with clients and maintain social distancing. While open houses are now almost non-existent with people staying home, Realtors are taking innovative approaches to working with both buyers and sellers. While face-to-face meetings must be kept to a minimum, virtual tours via phone, detailed video tours as opposed to in-home tours have become the “new normal.” Realtors with motivated buyers are doing private home tours, driving separately and coming prepared with masks, gloves and hand sanitizer as part of the tour.
COVID-19 is forcing companies to innovate and find new ways of conducting business. At Landmark Title we, are continuing to operate. Our offices remain open with 65% of our team working remotely and our in-office staff regularly sanitizing office surfaces and maintaining social distancing.
We are also using Remote Online Notarization (RON) so clients can get documents safely notarized anytime, anywhere.
If you have a residential or commercial real estate transaction and need escrow or title services, we are available to answer your questions.