I saw the best post on Facebook the other day – about not believing that it’s September already and how it seems like March was only 16 months ago.
Can you relate? I’m sure you can. Whether you’ve been balancing working from home and home schooling, an unexpected change of employment or the itching desire to get out and do something – anything! – and hoping that when you open your front door, it’s not still over 110 degrees outside.
It’s been a long 2020. If someone hasn’t told you lately, you are doing a great job.
With continued uncertainty politically, socially, domestically and globally, there is one piece of our local economy that remains strong and it’s something so important that we may not even truly understand how different things could have been.
At the beginning of the year, the real estate market was on the fast train with low inventory, healthy buyer activity and a homebuilder community ready to start building some new options in the area.
When COVID hit, many thought the real estate market careen into the nearest ditch and we’d all have to add our home value to the list of concerns we had coming our way.
Unfortunately, many of those doom and gloom predictions hit the airways, causing fear in consumers and that fear paralyzed many from making any moves in March and April.
What didn’t change, however, was the need for housing. Some might our needs with the need for home offices, home schools and maybe some more outdoor recreation options like a pool. Buyers flooded the market as the temperatures started to heat up and sellers started to see the impact to sales prices very quickly.
We saw a significant drop in interest rates taking demand to historically high levels as inventory struggled to keep up. The low inventory got lower and builders’ sales agents started to feel like order takers just trying to get people in as quickly as possible.
We ended the summer with less inventory than we started and now have just 8,313 listings available in all of the MLS out of about 1.5 million actual homes, townhouses and condos in the market and a population of nearly 5 million people.
We’ve got just over a month’s supply Valley- wide, just under a month in places like Gilbert and have surpassed double-digit appreciation annually in many ZIP codes.
As temperatures start to come down, we’re seeing anything but cooling in the Gilbert real estate market.
We’re not seeing any sign of weakening demand, although we might if there is a change to interest rates or buyers start to have some fatigue over the challenges of putting in multiple offers.
Supply continues to fall – although not quite as dramatically as it has been. We expect to see more listings come to market over the next 30-60 days thanks in part to those soaring prices.
Average days on market is plummeting to less than two weeks in many areas, making the home selling process quick.
Need a house with a pool in Gilbert under $500K? There are 15 of those. How about a home with four bedrooms under $400K? There are 20 of those. A home with an RV gate under $300K in Gilbert? Sorry, not a single one right now…but keep checking or better yet, let us know if you have one to sell.
It’s not just the lower end of the market that is moving quickly, either. The luxury market is back in full force too – which means we’ll definitely see a sharp uptick in the average dollars per square foot.
We’re already reaching new highs at $200.64 for new listings in Gilbert with a 4.5 percent increase just since last quarter. It could be the rebound of the stock market or the influx of buyers from states like California.
With an average home sale price of over $1 million where our coastal peers are coming from, for every one house they sell there they can buy two here.
That means any growth in inventory here still won’t match demand.
And all the folks that have had to take unemployment and will have challenges qualifying to buy?
They’ll still need housing – which means rental prices will go up, which means demand for rentals will go up, which means folks will be able to pay top dollar to build a rental portfolio and still expect a cash flow.
The bottom line: there has never been a more opportune time to get your home sold and have as much buying power as you do today.
This unicorn market creates the proverbial win-win where you can sell high and buy low with interest rates, preserving your monthly payment at any price point.
If you face a potential change in employment, took the forbearance option and have received a letter from your lender with options for getting back on track, are thinking about living closer to family or need more space for the family you are living too close to, don’t be left behind wondering what 2020 could have meant for you.