By John Cabezas
with LIV AZ Realty
The chances the world will return to everyday normality are very good. We’ve seen viruses spread across the country and the world. This is not our first rodeo. We’ve seen everything from the Bird Flu in 2005 to the Zika Virus in 2016. We’ve experienced some kind of potential pandemic since 2000, and we always survive just fine. I am confident that we will be able to put coronavirus into the category of other “close calls.” Unfortunately, this one seems to be different, and has already altered our lifestyle.
The question for this article is, how will this impact Arizona real estate? The housing market has been running strong for quite some time now and is still strong. The Federal Reserve recently dropped the rates to zero and are planning bailout money should the need arise. Of course, the Fed dropping the rates to zero doesn’t mean zero percent loans. What it means is that mortgage rates will hold at the current low rates and more than likely go down. This is great news for the industry.
With historically low rates, lack of inventory, and a strong employment market (this virus will affect employment in the short term only), there has never been a better time to sell or buy. It is still a seller’s market and inventory is still quite low.
Here is an interesting statistic which proves how our market has changed in the last two years: in all of Maricopa County there are only 24 homes for sale under $130,000. Two years ago, that would not have been the case.
Homes in the $180,000 to $300,000 range are still receiving multiple offers, even during this virus scare. Mortgage lenders are, as they say, busier than a one-armed wallpaper hanger. We just recently received a full price offer on one of our listings, with a 15-day close. We accepted the offer, but when I called the lender to see of it can close in 15 days, his response was a chuckle. Lenders, between new loans and refinance loans, are swamped.
Speaking of Refinancing:
The worldwide coronavirus pandemic has sent the U.S. Treasury rates into a sharp decline. This in turn has driven down the interest rates on real estate loans. Homeowners who are in the process of refinancing existing loans will reap the benefits of these lower rates. If rates continue to stay low, more borrowers will rush to refinance and lock in rates that are at historically low levels.
The Bottom Line:
While the worldwide coronavirus outbreak does not seem like it will have a significant impact on the Arizona real estate market, it may ultimately have a positive impact. That is of course, if we Arizonans don’t panic. The one factor that no one is in control of is panic. This is why the shelves at your local supermarket are empty…people panic. Panicking is the worst thing one could ever do in a crisis or difficult situation. Ladies and gentlemen, this too shall pass.
A Cuban born immigrant and businessman, John spent 25 years as an executive in corporate America, has co-written a real estate ‘How To’ book, is a three-time guest on Real Estate Matters (960AM) Talk Show and is currently a partner and Realtor at LIV AZ Realty. In his 20 years as a Realtor, John has been involved in major remodel and renovation projects throughout the valley. View his real estate blog at www.livazrealty.com