2020 started off with an extremely strong real estate market. The first quarter of 2020 reported the highest gross dollar volume sales in Arizona MLS history. The average sales price was up 11.2% year over year, while inventory was down 21.3%. The small supply of homes on the market was pushing the average sales price higher.
It has been several weeks since the Coronavirus public health crisis started and the effects are being felt in the Scottsdale real estate market.
- Real estate was declared an essential service by the Arizona Governor. We are open for business during the crisis. The whole industry including real estate agents, title companies, appraisers, lenders, and inspectors have been working while following CDC guidelines of social distancing.
- Real estate activity is down but we are not seeing any significant effects on pricing yet. The median sale price in Phoenix for March was $302,000. The ARMLS Pending Price Index anticipates the median sales price will decline only slightly. It is projecting a median sales price of $299,900 in April.
- The overall activity decreased significantly due to the advancing Coronavirus cases and stay-at-home measures to slow it down. By mid-March, we saw an increase in listings going temporarily off the market. Many sellers didn’t want strangers in their homes for fear of contracting the virus. There was a very temporary increase in new listings during the third week of March. Anecdotal evidence points to many of these listings being leveraged short term rentals. By the end of March, the number of new listings was down 12% compared to March 2019. The overall number of showings was down 49.3% on March 29th, compared to the same time the year before.
- Serious buyers are taking this time as an opportunity to buy a home with less competition than 3 months ago. Everyone still needs a place to live, whether it is as a full-time or seasonal residence. Deals are still closing every day, despite the slowdown.
- The number of homes for sale is still very low so new listings are attracting attention. Scottsdale is going into this crisis with a much lower inventory than normal at this time of year. This is completely different than the downturn in 2008 when there was a glut of inventory. The lack of inventory will help the industry bounce back much quicker than during 2008.
- People across the country are at home looking at real estate websites. The number of online views on our websites and national real estate websites is up significantly. If you are considering selling, now is a great time to list your home for sale.
- In March the mortgage industry was starting to tighten credit standards for new loans as banks tried to fend off disruption and losses during the COVID-19 pandemic. The situation is not as dire as first reported. Buyers will definitely need to show more documentation during the process with multiple income verification steps up until closing. It is more paperwork and effort, but buyers with steady income will still be able to qualify for a new mortgage. Interest rates are very low which will help entice more buyers into the market.
- I have personally seen a significant increase in the amount of activity of showings and listings since Easter. I believe people are starting to come to terms with our “new normal”. I expect the first two quarters of 2020 to be slower than last year, but I am hopeful that 2020 will end on a strong note. Buyers are still buying, and sellers are still selling.
Please contact me if you have any questions. I am here to help.
Carmen Brodeur JD
Trillium Properties, LLC
Cell (602) 791-0536