While the world was turned upside down and economic engines came to a grinding halt as the COVID-19 outbreak unfolded, the Phoenix metropolitan housing market has remained steady.
In particular, certain pockets of the East Valley and central Phoenix are seeing typical sale prices, modest increases in valuations and a healthy seller's market as Maricopa County continues to entice new residents.
Data provided to Independent Newsmedia reveal consumers held back on purchasing a detached, single-family home during the early months of the ongoing pandemic. But four months in, consumer confidence has returned, real estate experts agree.
“In the past when economic hardship or crisis occurs, we generally think of high inventory and low demand,” said Ronaldo Lewis, principal at One Sky Realty, a brokerage operating throughout the Valley of the Sun.
“People tend to be less confident to make moves within the hardship, which is understandable given the uncertainty of the future. I actually think growing from our past hardships has made us stronger, as it should, to endure the next crisis and, well, here we are.”
“Overall, in the East Valley region for the ZIP codes 85142, 85118, 85119, 85120, we saw a decline in sales between April and May,” he explained. “Then the market regained its confidence coming back to the 350-380 sales mark it seems to be comfortable at.”
During the past five months, single-family homes within the above ZIP codes saw this sales volume over the last five months:
Data show, during the month of July, the city of Apache Junction experienced 84 single-family homes sold at an average of $180 per square foot. Meanwhile, the town of Queen saw 230 single-family homes sold at an average of $165 per square foot.
Analyzing the data, Mr. Lewis contends this is good news for both Apache Junction and Queen Creek real estate.
“The data in Apache Junction does tell a great story if you look at this past year, the inventory to sales mirror each other. Meaning when more listings came on the market the sale of those listings followed quickly as the demand was ready and awaiting the inventory,” he said. “As well as when less listing came on the market, fewer sales were able to happen, not enough quality inventory. One example of this trend from this last year is from October-November 2019, active listings went from 132 to 160. Then sales from November to December 2019 went from 57 to 89.”
--- Ronaldo Lewis
Mr. Lewis explains when a market sees outside factors causing fluctuation, a true sales baseline can be found.
“Anytime a market goes outside of its normal is when it will show what type of market it really is,” he said. “When listings went to its peak this year and the sales were right there waiting, that lets us know the demand is there for sellers to keep selling. Had the market not responded to the increased inventory then it would be a flipped market and better for the buyers as they would have more inventory and negotiating power.”
Conversely, in Queen Creek, Mr. Lewis points to a significant change in market type, data suggests.
“From March to April 2020 Active listings reached its peak at 395 actives for the past year,” he said of Queen Creek Arizona Multiple Listings Services data.
“This was also the beginning of the pandemic market pause and decline of new inventory. The thing that stands out the most is the rate of absorption from the peak in the active inventory of 395 to July’s active listings of 239. This is a 40% reduction in inventory in three months during a tumultuous time of the economy, while sales increased at 37% during the same period.”
Mr. Lewis says there is a great demand in the Town of Queen Creek, pandemic or not.
“This screams high demand at the current moment for this specific market,” he said. “In July, Queen Creek left off with more sales than active listings; having 268 in sales and 239 of active listings. Putting the current absorption rate as of July at a mere 1.2. This has gone down 63% since August 2015 when the absorption rate was 3.16 which is a more balanced market.”
For Mr. Lewis, he sees both real estate markets as a seller’s haven.
“With that being said about both cities, what we are seeing currently is a sellers’ market for both directly tied to inventory and fueled by great economic growth,” he said. “Overall our values, I believe, will continue to be extremely competitive within Arizona as well as other states. This is due to our strong economy; with the many businesses sectors and population seeing the benefits, that we already see, of living in Arizona especially the Phoenix Metro Area.”
For Scottsdale Realtor, Gary Shapiro, the single-family housing market in “The West’s Most Western Town” is as steady as it comes — despite the time of the novel coronavirus.
“The housing market for Scottsdale has been stable and predictable for the past year. Routinely, we can expect 500-600 closed sales per month with some exceptions,” he said. “February 2020 had over a 1000 sales. July 2020 had over 800 sales compared to July 2019’s 532 closed sales.”
Mr. Shapiro has been selling homes for more than 40 years, is a premier broker at Coldwell Banker and has earned the coveted Realtor emeritus status from the National Association of Realtors.
Data show of the 913 Scottsdale single-family homes sold during July, the average price per square foot is about $272 while the average sold price of a home was $699,147.
“I don’t expect prices to fall. There are too much demand and a scarce supply of inventory. Scottsdale continues to be a coveted address,” he said. “I’m advising clients it’s a bad idea to sit back and wait for bargains. It’s far more important to keep their eye on the ball and score a home run by acquiring a home that meets their needs.”
--- Gary Shapiro
Mr. Shapiro has weathered global crises before, he says.
“Economic and health issues affect real estate. Historically, metro Phoenix is generally the last to be adversely impacted and the first to experience a come back,” he said. “In the early days of 9/11, we saw a limited number of cancellations due to the horror and uncertainty. However, there was a radioactive half-life that took effect. The pendulum shifted back to normal with the passing of days and weeks as things got back to normal.”
And, after all, the sun is still shining, Mr. Shapiro points out.
“In the five decades I’ve been a Realtor in Scottsdale, our market has been driven by what I call ‘Shapiro’s Law of Sunshine,’” he quipped. “The rest of the country suffers from bitter cold, tornadoes, hurricanes and flooding. We have palm trees and blue skies. Where would you prefer to be?”
For Mr. Lewis no matter what city you call home, he says, the Valley of the Sun has the No. 1 ingredient to a healthy housing marketplace: People.
“What is driving the positive nature of our market is a very simple truth, and that is the people,” he said. “Just last year, according to the U.S. Census Bureau, Arizona had a growth percentage of 1.7% from 2018-19 ranking us third now for growth rate up from fourth. This shows us what people want in the U.S. and that is some good ol’ Arizona living. Hence why we see the inventory shortfalls we see in many desirable Arizona cities.”