July Greeting From Darrell
June didn’t bug the Phoenix area real estate market much at all, not even in the luxury category of $1 million+ homes. In fact, June squashed May’s numbers.
Real estate authority Fletcher Wilcox reported that single family home sales of 6,736 in June beat May’s sales by 1,940. Compared to June of last year (when nobody had heard of COVID-19 yet) Phoenix was behind 2019 sales by only 91 homes. And in the luxury market of $1 million and up, there were 219 sales in June, up from 136 in May. Not too shabby at all! (Data Source: Arizona Multiple Listing Service ARMLS)
According to the realtor.com Luxury Housing Report released on June 25, the luxury market outpaced the rest of the housing market nationwide in both price growth and views. One theory is that social distancing and stay at home orders are placing renewed value on extra space: high-end buyers may be looking for a second home not too far from their primary home as a place to get away for a change of scenery.
If you are the type who loves to pore over data and analyze statistics, you’ll find several charts and graphs on my website’s Local Market Statistics page, https://www.darrellazluxury.com/market-statistics/.
What’s next for the housing market? Is a foreclosure wave on the horizon? Will mortgage forbearance turn into foreclosure? Is there a “perfect storm” brewing in Arizona that will cause home prices to drop as some are predicting? We’ll have to watch and see how quickly economic activity rebounds and employment numbers recover.
From my perspective, fear of the virus doesn’t seem to be spinning out of control. There’s no evidence yet of desperation selling fueled by the unemployment situation. Government lending standards are not overly restrictive; mortgage rates remain low. Legislators are performing an unprecedented tightrope walk, with the weights of public safety and economic health at opposite ends of the balance pole.
I don’t wear prescription-strength rose-colored glasses; nor am I a Chicken Little type of person. While there may be some cloudy and stormy days ahead, I don’t see the sky falling. Only time will tell.