What is our market doing in June 2020? Though we’re definitely still dealing with COVID-19 here in Arizona, things are starting to open up a bit.
There was a 39% drop in activity over the course of roughly six weeks (March through mid-April), and only now that we’re another six weeks beyond that, the effects of that sudden decline are really starting to show up in the data. There’s been a 31% decrease in sales, but this is hardly surprising; it’s hard to sell homes if no homes exist on the market to be sold.
However, what is truly surprising—and what’s not being reported widely yet—is that we’ve had a 40% increase in accepted contracts in just the past four weeks. We find it important to share this fresh stat because those who are in the market to buy need to know what’s happening right now, not what happened weeks ago. The lull in the housing market and overall economy was as real as ever, but all of the latest indicators suggest that real estate has already begun to rise out of it.
‘Sales are down’ is already an unhelpful mantra; sales are always a lagging indicator representative of a market that is 30 to 60 days old. On the other hand, the leading indicator is pending inventory, and our Phoenix market is now well beyond 10,000 homes under contract. We’re seeing multiple offers on properties, especially on homes priced under $500,000.
That being said, there may be more deals available for buyers, depending of course on what you’re looking for. There’s more inventory available now in the higher price points ($500,000 and up).
Mortgage rates are still unbelievably low. Take, for example, a $300,000 home (the average for the Phoenix area) purchased with a 30-year fixed mortgage; one year ago, the monthly payments would have $1,450 per month, whereas in June 2020 that same loan costs only $1,307. Yes, home prices are going up, but the cost of money has never been cheaper.
So, if you’re a potential buyer waiting around on the fence for the market to crash, we’re sorry, but there’s simply no indication that something like that will happen any time soon. However it is worth noting that homes are more affordable to purchase and live in than they were just a year ago.
If you’re thinking about buying a home and want to know some of the strategies we’re using to help people compete in multiple-offer scenarios, reach out to us by phone or email. We’d love to look over your unique situation and apply our expertise. Remember: We’re always here to help.