As the coronovirus (COVID-19) pandemic makes its way through the US, and the stock market turmoil roils the portfolios and 401(k)s of many Americans, it’s not unusual that many people may question the overall health of the real estate market. The 2008 real estate meltdown still burns very brightly the memories of homeowners.
As the market report indicates below, the Fountain Hills area is experiencing a bit of a slow down in real estate transactions. The number of listings are down and houses are spending a few more days on the market, but the number of closed transactions and prices were up in February. This indicates that there are still buyers in the market, and home values continue strong upward movement.
Check out the market reports for other areas around Phoenix.
However, this was February (the latest data we have). It is possible that listings and sales will soften in the late 1st quarter and early 2nd quarter, as many buyers and sellers may exit the market to wait for the fear in the markets to subside. With pressure on jobs, some who wished to purchase a first home or move up to a larger home may re-evaluate the timing of taking on such a large purchase.
Keep in mind, though, that this softening is caused by temporary external forces, and is not endemic to structural issues within lending and credit or over-pricing in the housing market. In 2008, lenders were making risky loans to ill-qualified borrowers, and debt service devoted to housing took up a greater share of homeowners’ income than it does today. The easy availability of credit and high home values meant that many homeowners used their home equity like an ATM, taking out money to fund lifestyle purchases that did not build more equity. As banks started buckling and job losses mounted, foreclosures overwhelmed the housing market.
Today, though, homeowners have more equity. As a matter of fact, over 37% of homeowners own their homes outright, and of those with mortgages, 25% have more than 50% equity. This stronger positioning will lend some stability to housing going forward.
We do not yet know how the coronovirus situation will play out in the US and in Fountain Hills, but we want to put any fears to rest that the situation playing out right now is NOT a repeat of 2008. Homeowners are in a much stronger position, and banks are not hampered by risky loans.
If you are thinking about selling a home, there are buyers in the market. If you are a buyer, interest rates are still low, making home ownership affordable. Real estate fundamentals are strong in Fountain Hills, and we are here to help you! Susan Pellegrini and Karen DeGeorge are ready to put their care and expertise to work for you. Buying or selling, our first-class service comes with a wealth of experience and eye for detail, ready to focus on you. Visit our website to learn more and contact us or give us a call at (480)- 315-1575, we’re here for you.