Arizona Real Estate Market Experiences Shortage of Housing Amidst Pandemic
Arizona real estate markets have been impacted heavily by the Coronavirus for the past several months and is showing signs of recovery since the phased reopening of the economy in June. With an average of 3,051 new COVID 19 cases daily within the past week along with a new statewide shutdown, there is concern over another decline in the real estate market.
Governor Ducey announced a statewide shut down at the end of June which the effects to the economy are yet to be seen. The shutdown is forcing gyms, water parks, movie theaters, and bars to remain closed for a 30-day period in attempts to lower the transmission rate of the virus. These industries make up a small portion of the Arizona economy and we will likely see minimal impact on the real-estate market during these 30 days.
Since the start of the pandemic, the number of homes for sale has fallen sharply and the number of listings closed has declined. However, last month was the best month for real estate in Arizona since the pandemic negatively impacted the economy.
The Tucson Association of Realtors reported in their monthly statistics report, there are 46.7% fewer homes listed in the month of June this year compared to the same month in 2019. Even though the inventory is low, the number of pending sales has increased by 31.7% for Single Family Homes since May of this year. This increase of sales can be attributed to low-interest rates and pent up demand of buyers who were not purchasing houses during the state shutdown put in place by Governor Doug Ducey.
Bob Zachmeier, a Tucson Real Estate Agent and investor said, “Inventory is at record lows with less than 1,556 homes available for 1,050,000 people in over 3,000 square miles! At this time a year ago, inventory was at record lows but there were 2,917 homes for sale (1,361 more than are available now). The amazing thing is that with the coronavirus pandemic, riots, forest fires, quarantines, and lockdowns, June sales dropped by only 45 homes from the same time last year! In 2007, the median home price in Tucson was $227,000 and interest rates were 6.5%. A median home today is $250,000 but interest rates are less than half at only 3%. The payment on a home bought in 2007 would be 20% lower today and most people have gotten several raises since then. Homes are more affordable than they’ve been in decades, we have a steady supply of new buyers, a limited supply of homes, and record low interest rates. The Tucson market should remain strong for as far as I can see.”
Due to low inventory, it is currently a great time to sell your house in Arizona, especially in Tucson. There is little competition so you can sell quickly without having many buyer’s objections. As Bob mentioned, interest rates are low which makes houses more affordable for people entering the market.
Craig Barton, an Investor with Easy-Man Buys Houses says, “The housing market in Arizona is strong as more buyers and sellers return to the market after the COVID-19 quarantine. The housing market is changing with each passing month and given the current fundamentals, real estate in Arizona should remain strong for the foreseeable future. Housing units are in short supply and low interest rates plus population growth will further increase demand for available housing. No one knows how persistent the coronavirus pandemic will be or how long the economy will remain in a recession. Since prices are high and a down real estate market trend is due, we advise buyers to move forward with caution.”
Craig agrees with Bob that the real estate is going strong but believes that you should be cautious when buying a new home, especially if you are looking to sell it again soon. Arizona has experienced a sellers’ market for several years and history dictates that market will shift to a buyer’s market eventually. COVID is still getting worse in the country, so it is difficult to predict if it will have an impact on real estate in the future but right now the market is strong in Arizona.
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Company Name: Easy-Man Buys Houses
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Phone: 520-365-9375
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City: Tucson
State: Arizona 91589
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Website: https://www.easymanbuys.com
