By John Cabezas with LIV AZ Realty
Wow! Not three months ago the state of Arizona real estate was a whole different picture. In January we were talking about a small uptick in interest rates and a strong new home construction. Builders had waiting lists for homes and were often 12 to 18 months out on the build. There was also a very strong pre-owned home market, and very low inventory of pre-owned homes. We’d been in a sellers’ market for some time.
The economy was humming along, the stock market was hitting new highs, and the unemployment rate was at historically low levels. So low, in fact, that many positions went unfilled due to lack of candidates.
Fast forward to today.
The COVID-19 outbreak and subsequent pandemic has changed everything. We now know that we may have to continue staying home and practicing social distancing until June, maybe even July. At least that’s the consensus as of the writing of this article. I certainly hope they are wrong. I can’t image the social and economic loss to this nation if that is true. It’s already been hard; I can’t imagine another two months.
But, life goes on, and so must we. Here is a snapshot of the current state of real estate in Arizona.
Sales As Of Mid-April
Though people say the numbers are slowing down, Empire West Title, our preferred title company, had a record breaking March 2020, and April seems to be coming in strong.
New listings are coming online every day, and homes are still getting multiple offers. Granted not in every price range, the sweet spot is in the $200’s to $300’s.
Inventory is still low, and if a home comes on the market, and is priced right, it sells quickly, sometimes with multiple offers.
Bottom line: sales seem to be holding well, and appear that they will for the foreseeable future.
A Look at Lending
Here is where we are seeing the most challenges. We hear from lenders that changes are almost daily. That many funding sources are pulling out of mortgage lending. That non-conforming loans (self-employed, low-FICO, etc.) are almost impossible to get.
We’ve heard of the FICO score requirements increasing, and seller concessions are frowned upon or not permitted.
We are hearing different things from different lenders; of course, it all depends on who their funding sources are, as each source has their own criteria. It would seems that lately that criteria is a moving target.
We’ve also learned that due to the huge unemployment rate we are currently experiencing due to the COVID-19 pandemic, lenders are verifying employment one to three days before close of escrow; it used to be 10 days.
The bottom line is that the state of real estate in Arizona is strong, and 85028 and 85032 are still selling strong. The only issue is lending, and trust me, the lenders will find a way to make it work.
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 livazrealty.com.