Since the COVID-19 quarantine began in early March, there has been tremendous speculation as to where the real estate market is headed. As always, we like to share with you what we are seeing on the ground here in the Valley based on our day-to-day experiences.
While the market slowed down in early March, by late March showings and activity started to pick up. By April, we picked up speed and when May hit, we were busier than ever. June has functioned at nothing short of breakneck speed. There is an urgency in the market like never before. Everyone wants to move as fast as possible and we are even closing financed deals in under three weeks.
Buyers are coming from all over the country, but in large portions from California, New Jersey, New York, Illinois, and now also Minnesota and Michigan. With telecommuting now an option for almost everyone, employees no longer need to live where they work. There is a stronger demand for single family homes in the suburbs and as we expected, homes that have room for a home office and feature lifestyle amenities like a pool or workout space are in greater demand.
While the demand is great, the supply is meager. We went into the COVID-19 crisis with a low supply of houses on the market already and our local inventory started dropping even further by the middle of May. Housing inventory is more than 50 percent below normal, new listings are down over 30 percent year-over-year, and prices are climbing quickly.
In Maricopa County, a county with 4.5 million residents, there are currently only 2,822 single family homes on the market under $500,000.
Homebuying currently looks like this: get pre-approved for a mortgage with a local lender (or have your proof of funds available if you are a cash buyer); watch the MLS like a hawk and see a home the day it hits the market; hope you can get into the house (some listings have so many showings you can’t even get an appointment); look at the house and quickly assess if you want to make an offer; know beforehand how much you can offer over the list price; write an offer quickly and work with a great agent who can help you get through the first round of offers; and pray that agent can help you win in a multiple counter offer battle. It is not uncommon to be competing against 10 or 20 offers depending on the condition and location of the home.
For sellers, by the time you put your house on the market, you need to be ready to move. Have your house dialed in before you list and make sure your agent can help you manage the showings with COVID precautions in place. Then have someone who can help you successfully negotiate multiple offers to get you the best deal and the best terms.
The luxury market has also seen renewed activity with many buyers coming from outside markets. There is not quite the same frenzy mainly because jumbo loans are harder to come by, but there is increased activity nonetheless.
Historically low interest rates and migration from other states will continue to fuel our local growth into 2021, and as one of the hottest housing markets in the country, our real estate market will help to fuel our economic recovery. It is nice that this time around, the housing market is not the problem, but rather part of the solution.
John Karadsheh and Natascha Ovando-Karadsheh are co-owners of KOR Properties, a boutique real estate brokerage serving the Valley of the Sun, and the creators and founding sponsors of Mesa Food Truck Fridays.
John has been a Multi-Million Dollar producing agent for over 17 years, and is an Accredited Buyers Representative (ABR) and a Certified Residential Specialist (CRS), and Chair of the Arizona Regional MLS Rules and Policies Committee.
Natascha Ovando-Karadsheh is an Associate Broker of KOR Properties, a Multi-Million Dollar producing agent, Past-Chair of the City of Mesa Economic Development Advisory Board, and Founder of the Falcon Business Alliance.
You can reach John at (602) 615-0843 and Natascha at (602) 909-4995, or visit their website at KORproperties.com.