To stay current on Phoenix area market trends we subscribe to the The Cromford Report and bring it to you every month. Michael Cromford is our local real estate data expert and is widely considered THE expert on Phoenix Metro real estate trends. Cromford gained fame as one of the few real estate gurus to accurately call the 2008 housing crisis, and we have followed him closely ever since. We have been reading his updates daily and thought it important to share some of his daily insights with you:
- 3/14: We have all learned a lot about the novel corona virus since my last observation on that subject. There is now little doubt that it will spread to every corner of the globe and will have a huge effect on the world, both in human and economic terms. It will therefore have an effect on the Phoenix housing market but these changes will be minor compared with the effect on families who lose loved ones and the businesses directly affected.
- 3/15: Arizona has less than 2 infections per million as of March 14.
- 3/16: Several subscribers have asked me what effect the corona virus is having on the housing market numbers and the answer so far has been almost none. I know this is hard to believe, but we scour the data every day for any sign of a change.
- 3/18: A number of people seem to assume that we are heading for a recession and that home prices will fall. The first assumption is quite reasonable. The second assumption is based on fear and has little analytical data to back it up. Obviously anything can happen in an uncertain and disrupted world, but a fall in home prices is still looking very unlikely from today’s numbers . . . In 2005 the housing industry started to sicken because homes were being used as speculative commodities not for places to live . . . In 2020, housing is an innocent bystander to a probable recession caused by a pandemic. It has supply at extremely low levels and most homeowners have a large amount of equity.
- 3/19: From looking at the housing numbers every day you would not be able to tell that we have a dangerous worldwide pandemic. There are a few slight changes in trend as mentioned on March 17, but compared with the chaotic financial markets, the housing market is steady as a rock.
As we all attempt to come to grips with this virus we can expect to see some impact on our local market. Obviously, workers in most directly impacted market segments–airline, restaurant, hospitality, travel, etc.–can expect to see a temporary reduction in income, and for many would be buyers, this will remove them from the home buyer pool for some months. And certainly others will be sidelined by other concerns–some economic–and many psychological or fear based. However, it is important to note that in our current Phoenix market the most significant driver of pricing remains the lack of available supply. As some buyers are sidelined, this will create additional opportunities for those who remain in the market–particularly those that have struggled to get a home under contract because of fierce competition.
Housing supply is at all time lows, rates remain at historic lows, prices continue to climb and the Phoenix metro real estate market remains fundamentally unchanged from several weeks ago. Lenders, title companies and real estate offices are all open for business, and we remain–as always–dedicated to continue to serve your real estate needs. We will continue to be vigalent and bring you any updates and changes as they occur.