COVID19 and Sun Lakes AZ Real Estate Market Report
COVID19 and Sun Lakes AZ real estate is creating quite a range of emotions in many people. As a result, many are comparing this virus with the 2005 housing market that resulted in the 2008 bust. While many feel we are heading for a recession and that home prices will plummet, we have some better news. It is true that we seem to be headed for a recession, however home value declines are highly unlikely from today’s numbers.
The 2005 housing industry began to weaken as homes were used as speculative commodities and not actual homes for living. Consequently, the housing industry and even more so the lending industry was the primary cause of the recession in 2008. In the 2008 recession both the stock market and home prices were in rapid decline. Our market in 2020 is not the fault of any recession caused by a pandemic virus. For instance, we are not seeing a decline in values.
Key Differences in the 2008 Recession and Today
Today in March 2020 supply is still at extremely low levels and homeowners generally have a large amount of equity from the past few years appreciation. Demand is still well above normal limits and has shown very little sign of slowing down. Only when demand collapses do the lenders have to foreclose. With the larger amounts of equity, a seller could easily find a buyer at a lower price that would allow a loan payoff. Another key difference is that in 2006 when buyer demand completely collapsed, builders continued to build. And, as a result that created far more inventory with no demand.
While builders may build fewer homes as they face a shortage in labor and materials, we are not likely to see an abundance of homes on the market for a very long time. COVID19 and Sun Lakes AZ real estate is faring quite well.
What to Expect as we Move Forward
Additional inventory would be a good thing to happen in today’s market. We saw many homes being bought up by investors over the past few years. And, we may see some of those investors offloading those homes. With the volatility in the stock market, this could be a great time for people to buy an investment home to create rental income. Homes in Sun Lakes are in high demand for snow birds who wish to spend three to six months in a warm climate.
In summary, we monitor the housing market through our local Multiple Listing Service and reliable real estate sources such as the Cromford Report. At this time, we see no cause for panic. As a result, we are also seeing lenders slash rates. Therefore, the lack of inventory and the low interest rates refute the thought process of waiting to purchase a home. Ready for more information on the Sun Lakes AZ real estate market? Contact us at firstname.lastname@example.org