Is now a good time to buy a home? That is the question on everyone’s mind these days. As some coronavirus regulations are slowly lifting, there is still some relative uncertainty around the lasting coronavirus market impact. Being armed with the right information will help guide you through the uncertainty and provide confidence in current housing markets. One thing remains consistent in these circumstances. Buying a house is still considered a stable and durable investment. Timing is completely dependent on your comfort level and readiness.
The Current Real Estate Market Outlook
Is the housing market going to crash? Given the dramatic shifts in the economy due to the coronavirus, this is another question that has been top of mind lately. Luckily, the housing bubble will not crash anytime soon. Prior to the coronavirus, home sales hit new heights with steady double-digit growth year after year. Stay at home orders brought this growth to a grinding halt. Still, America is expected to recover. It may be a slow and weak recovery but as the stay at home orders lift, so will the housing market.
The good news is that current housing markets are expected to heat up, with growth in all 4 components of real estate activity including supply, demand, pricing, and sales. Generally, it is currently a seller’s market, with home prices rising and mortgage rates falling. While sellers can rejoice, buyers should be aware of how this will impact their options. Obtaining a mortgage loan has become more challenging with higher credit scores and down payments required.
Buyer demand is being driven by the willingness of sellers to negotiate great offers and buyers desire to take advantage of current low mortgage rates. According to Realtor.com, it has taken 5 months for sellers to return to the housing market, making it the last component to recover from the pandemic. Sellers in more expensive markets seem to be moving housing inventory much faster than other areas of the current housing markets. Since June, the current real estate market has made a significant rebound.
Is Now a Good Time to Buy a Home?
Buyer activity in the current real estate market has also rebounded. As noted before, low mortgage rates, population growth, and increased buyer interest. While housing prices were predicted to fall, they have remained steady and have increased in most areas of the country. Housing prices may continue to rise by 10% over the next 2 years as a result of the housing shortage. Due to heavy buyer competition for the short housing supply, buying during peak months may not be the best strategy for you. Some considerations to keep in mind in the current real estate market:
- Median home prices – Nationally, median home prices have risen to new heights of over $350,000 in July and are expected to continue to increase.
- Housing demand – Demand remains high with short housing supply driving up prices. The current housing market still has not reached normal levels as of yet.
- Housing sales – Overall sales are expected to be lower by 15% due to coronavirus concerns and decreased buyer confidence. However, the current real estate market is expected to see improvement and growth as concerns over the coronavirus decline.
- Affordability – Households that are spending more than 25% of their income to purchase a home can expect to face financial challenges and stress. The current affordability index of 170 indicates that more families are priced out of the housing market. The economic shutdown had a dramatic impact on incomes and families who would otherwise be able to afford a home purchase.
What Is the Coronavirus Market Impact?
Zillow.com predicted a housing recession would take place in 2020 due to shifts in monetary policy. Although accurate, home affordability was expected to increase prior to the coronavirus. The current real estate market indicates that those who would be purchasing their first starter home can’t afford to. In fact, prices for starter homes and affordable homes will continue to increase to double-digit rates. But due to the lack of people in skilled trades of construction and the rise of minimum wages in these industries, the prices of new homes being built will continue to rise as well.
While moving costs and inconveniences have kept families in their homes for longer periods of time, some generations will remain in the rental market as a result of the 2008 financial crisis. Surprisingly, the millennial generation accounts for half of all mortgages. This group has been incredibly influential in the current real estate market by prioritizing low maintenance and energy efficiency. Walkable communities are a high priority but this group will pay a premium to be close to public transit. Homes that meet these requirements will continue to rise at double digits.
House-hunting strategies should be tailored to each person. Although the most popular times to buy and sell homes are during the summer months, buying a home when the competition has died down will be your best bet. This takes place during the winter months. January is an opportune time to house hunt as many homeowners are willing to negotiate lower prices to get the home off the market. Remember, the longer you wait, the more negotiating power you have.
Current Real Estate Market Forecast for Arizona
While there is no crystal ball to tell the future, there is certainly data, trends, and economic factors that can provide a solid forecast for current housing markets. According to Forbes, Arizona is one of the best states to do business, ranking high in labor supply and growth prospects. This may explain why Scottsdale and Phoenix are two of the hottest real estate markets in Arizona, with average selling prices higher than last year. This growth is expected to continue for the next 3 years!
Although housing prices had slowed initially with the coronavirus, the Arizona current real estate market has been showing strong signs of rebounding with low inventory and high demand. New home prices continue to rise while resale home prices decline slightly. Some general forecast information to be aware of:
- Home prices are expected to flatten and balance out
- Inventory will remain low
- Mortgage rates will continue to be low
- Buyers looking for affordability and space will flock to the suburbs
Call the Best Real Estate Agent in Happy Valley AZ Today!
The unprecedented health crisis and the economic fallout have changed home-buying habits but home purchases have continued. The coronavirus has placed a temporary buying restraint on current housing markets and is expected to result in a temporary increase in sales as fears decline. As jobs and financial outlooks slowly recover, the current real estate market will continue to grow. Until then, partnering with the best real estate agent in Happy Valley AZ will guarantee the best deal.
You’ll be working with an award-winning and leading real estate agent in Arizona who has been serving the Phoenix, Scottsdale, Paradise Valley, and surrounding areas for over 20 years. As one of the top 1% of real estate agents in the nation, Jeff Barchi averages around 50 transactions a year. No matter what is going on in the market, our team delivers.
Thinking about buying or selling a home during the coronavirus? Contact Jeff Barchi, the leading real estate agent in Happy Valley AZ today!