Home sales and rentals soar in the Phoenix area despite COVID-19 pandemic
PHOENIX - The Phoenix area is making headlines again for a hot housing market, both in terms of home sales and home rentals.
On average, Phoenix area home prices are up an average of 10% from this time in 2019, and selling in an average of 10 days, rather than 22, making Phoenix the hottest market in the country for increased home prices, and the second-highest for higher rent prices.
Supply and demand a factor
The issue is simply a matter of supply and demand, as inventory remains low from the economic downturn over a decade ago. In addition, during the age of COVID-19, it appears buyers are braver than sellers, who for the most part are willing to sit tight.
“It seems like existing homeowners are not really listing their homes. They never came back to the table after stepping back in March the way buyers have. So the longer that goes on the longer this gets worse,“ said Economist Jeff Tucker with Zillow.
Tucker says the shortage of inventory, along with record-low interest rates, are pushing home prices. In addition, many maturing millennials are ready to move on up.
Rental market also hot
Unlike many other cities, renting in the Valley won’t come cheap.
"Such a shortage of homes for sale, in those prices, are rising so quickly, that renting still looks pretty appealing by comparison," said Tucker.
Future could be uncertain
Predicting in a pandemic is problematic, with Zillow officials seeing growing confidence among home builders.
Beyond that, however, home sales depend on the economy, which depends on the virus.
"The biggest kind of unanswered question is what happens with all these homeowners who are in forbearance?" said Tucker. "It runs out the 12 months on the clock. Are they then going to be motivated sellers? Those would really throw some cold water on the housing market, possibly next summer."
Tucker says before anyone decides to buy a home, they should make sure their job and finances are secure, and before anyone sells, they should realize they will have to find another place to live, which probably went up in price, just like their old home did.