• For 2 months (March-April), the market tanked.
• For 2 months (May-June), the market soared.
• For July, the market peaked and stopped getting crazier but it’s still way crazy tight.
In May-June, demand rebounded before supply so the market became incredibly out of balance. Supply slowly started to increase and it kind of caught up with demand in July but only enough to stop the market from getting any crazier.
In the next phase – probably starting in September – we’ll see fewer sales and relatively more houses hitting the market. The market is a long, long, long way from the normal range but I expect it to start moving in that direction in September.
Advice to Phoenix Home Buyers
I expect the super low interest rates to continue to fall and to put upward pressure on house prices for many, many months after mortgage rates stop falling. That’s the one big advantage to buying sooner rather than later, if you were planning to buy within the next year anyway.
Advice to Phoenix House Sellers
If you were planning to sell the place within the next few years anyway, I’d say sell now. Prices are increasing fast which lowers your urgency to sell now but we have a huge number of unknowns out there.
What will be the impact of;
1) Expiring eviction moratoriums,
2) Reduced and eventually expiring unemployment benefits,
3) The eventual expiration of the mortgage forbearance programs end, and
4) The recession spreading into more sectors of the economy?
The high season for house sales is ending. We may have a very different market when the 2021 high season starts.
For U.S. real estate market analysis,
go to Real Estate Decoded.
The number of single-family houses hitting the market in July was similar to 2019 after running far below 2019 for the 3 previous months.
It’s clear the number of houses for sale has stopped falling but it’s still about HALF as many as in 2019 at this time.
The number of houses under contract to buyers seems to have stabilized at about 10% to 15% above 2019 levels which means completed sales in August will be similarly high.
The number of single-family houses sold in recent weeks have been a lot higher than in 2019 and will remain high for at least a month.
Tell me in the “Comments” what you think.
This information can vary a lot in different parts of metro Phoenix. Your real estate agent can find the data for your specific city or zip code at The Cromford Report.
Note. This post was written on July 27, 2020 but the graphs will be continually updated.
2 Responses to Phase 3 of the COVID-19 Real Estate Market – The Peak
I think this market is going to keep going up until the financial assistance is over. Although, for the past few years I thought we were due for a raise in interest rates and small correction in the housing market. It seems that the financial bubble is to big too fail now.
I love that, “The financial bubble is too big to fail”!
For years, I thought we would see a large correction until earlier this year when I quantified the impact lower mortgage rates have on monthly mortgage payments, https://realestatedecoded.com/the-shocking-truth-about-house-prices-since-1990/.
Now, I don’t expect a big price correction and we’d have to see a huge increase in supply for many months before we’d see any price correction at all.
Comments are closed.