Metro Phoenix’s housing market started 2020 so strong analysts said it would take a catastrophe to slow it.
The coronavirus pandemic likely will push the U.S. and Arizona into a recession. The crisis hasn’t put the brakes on Valley home sales or pushed down prices so far, though this week’s unexpected uptick in mortgage rates likely won’t help.
Tina Tamboer, senior housing analyst with Cromford Report said some buyers recently have pulled out of Valley home sales, but there has been so much pent-up demand that the sellers had other offers lined up.
Pending home sales still are up 9% from last year, and the supply of houses for sale priced below $300,000 is flat but hasn’t climbed, according to Cromford.
“The stock market has been crashing for weeks, but we have only seen some pullback in the housing market, even for million-dollar homes,” Tamboer said.
“Remember in 2008, the stock market crashed because of real estate,” she said. “Real estate doesn’t crash because of the stock market.”
Open houses likely won’t be a big draw for many potential buyers because of health concerns, but virtual tours of homes are becoming more popular.
Mike Orr, Comford's founder, said the housing market should expect some immediate impacts from the coronavirus, as governments in Arizona and across the U.S. shutter businesses in an effort to stem the spread of COVID-19.
He predicts those impacts could include:
Homes for sale will still be very scarce so prices are not likely to fall. Those who think prices will drop are likely mistaken, Orr said.
President Donald Trump announced Wednesday foreclosures and evictions on HUD properties would be suspended until the end of April.
Foreclosures are at record lows in metro Phoenix and typically take three months for lenders to legally process, so that won’t have an immediate impact in Arizona.
A halt on HUD evictions will help lower-income renters. But most of metro Phoenix apartments are privately owned.
Due to the coronavirus crisis, Maricopa County Justice Courts have asked justices of the peace to delay eviction hearings for renters.
Nearly 2,000 Valley residents are facing losing their rental homes to eviction now, according to court filings.
It will depend on the elected justices of the peace in each of the 26 Justice Courts across Maricopa County what protection renters will get.
Real estate agents are fielding calls from buyers and sellers concerned about a recession and slowdown in the housing market.
Christa Lawcock of Realty Executives is working with some first-time buyers who are worried about losing their jobs, although they are paying more in rent than they would with a mortgage.
“Too many people are freaking out about the housing market right now,” said Christa Lawcock of Realty Executives. “We will get through this. Everyone needs a place to live.”
Tamboer said for home prices to fall in metro Phoenix, sellers would have to be willing to take much lower offers and many have so much equity in their homes they won’t do that.
National housing analysts John Burns said metro Phoenix will fare better in an economic slowdown or recession than other parts of the U.S.
Relatively lower interest rates for home buyers, an undersupply of new homes and projected stronger-than-average job and population growth in the Valley are why.
“It won’t be a housing-led recession this time,” he said. “Phoenix always fares better in downturns not tied to housing.”