State of the Real Estate Market Notes

I am currently sitting in a state of the real estate market meeting. I do one of these every month (usually in person). This isn't my usual meeting. But it was sponsored by my marketing representative and friend, Sarah, so I said I would go. It gives me a chance to stay current on what I am being told is an ever-changing market. There are at least 500 agents on this meeting. And I happen to know one is recovering from COVID-19. Glad to see he made the meeting.

Here's the latest take-aways on the Arizona Real Estate Market as of 4/9/2020.

1. Not everyone knows how to mute themselves on a virtual meeting and it is apparent someone is eating sunflower seeds or something equally as obnoxious.

2. There are currently 14,208 real estate units for sale in the Maricopa County/Pinal County area. Of that, there are 11,300 single family homes for sale.

3. The guy running the meeting is telling us to start talking to our clients by asking about their health and welfare first. Really? That needs to be said. Ever? At any time? Isn't, "how are you?" kind of a standard?

4. For those in AZ and are in need of financial housing assistance. Go to the AZ Department of Housing. They have several resources to help people keep their homes. There has been $20 million dollars allocated for this program.

5. "Only when the tide goes out do you discover whose been swimming naked." --Warren Buffet

6. By March 23 the Ibuyers (Zillow, Redfin, Offerpad, Open Door) all pulled out of the market. Most of their purchases were under $300k.

So most contract fallouts have been under the $300k market. In fact, 50 percent of all contract fallouts under $300k were Ibuyers. My takeaway is that the Ibuyers and investors were monopolizing the first-time buyer market.

7. There were 853 contracts written for homes under $300k last week. Given the Ibuyers have pulled out, it stands to reason these are buyers looking for single family starter homes and not investors.

8. There were 145 properties taken off the market last week. The majority of these homes (over 60 percent) were over $500k.

9. Property values are not going down.  Just because the stock market is burning, real estate values are on their way up. There is a slight change in seller expectations. Homes may stay on the market longer. There may not be as many multiple offers. There isn't seller price reductions right now. Prices are steadily up. However, there might be more closing cost assistance and seller repairs. And appraisals might be weird because appraisal processes are weird anyway.

10. Prices in real estate are still rising. This is steady even through the stock market crash 8 weeks ago. We are still in a hot market. Plus, to convince a seller they need to fire sale their home when there were 11 offers six weeks ago, would be very difficult.

11. Rental supply has increased 17 percent in the past month. However, some of this is likely to be vacation rentals that have been converted to long-term rentals. The rental pricing though has stayed steady for more than a year.

12. The same home a buyer would pay for in 2006 has a payment of $200 more a month because of the difference in 2020's interest rates. Good to know!

13. Supply is still low. However, supply has grown 27.3 percent in three weeks. However, inventory is still 30 to 40 percent lower in supply than this time last year. A "healthy" supply is 35,000 homes on the market in this area. There is not a huge increase in supply in the luxury home market.

14. There are currently 2.07 buyers for every seller. There is a 52.2 percent drop in supply from this time last year.

15. There were 1,508 new contracts throughout the Phoenix metro area (in all price ranges) in the last week. This is similar to point number 6, except this is for ALL properties.

16. In the past three week, we have stopped seeing contracts coming in over asking price. Last month 28 percent of all contracts were over asking price. This isn't the case right now. It is becoming a "regular" market where the buyers have some negotiation room.

17. Buyers should not be thinking they should pull out of a deal because they might get a "better deal" next month. That's probably not going to happen.