Leading the nation once again in home price gains, Phoenix appears to be immune to Covid-19.
At 8.2%, Phoenix reported the highest year-over-year gains during March, according to the S&P CoreLogic Case-Shiller Indices, at a time when the national year-over-year gain was 4.4%.
Tina Tamboer, who keeps a pulse on home sale contracts that have been signed as senior housing analyst for The Cromford Report, said April numbers show the Phoenix market already has rebounded. I asked her about what other factors are impacting the Valley’s housing outlook.
Is Phoenix home price growth immune to Covid-19? Housing values don’t respond to viruses typically, but that doesn’t mean they’re immune to Covid-19. Housing values respond negatively to prolonged vacancies. Government responses to the pandemic in terms of mandates and financial aid can both hurt and help real estate values in that regard.
What would minimize vacancies and retain home values? A massive death rate; more residents moving out of the metropolitan area versus moving in; excessive financial strains (medical or job-related) that would cause multiples of two households merging into one, thus leaving a vacant home for sale or rent; a high percentage of homes dependent on tourist demand/travel, which creates vacancies in the wake of travel restrictions and major event cancellations.
What do you see for the Valley’s housing market? I expect the Case-Shiller Index will report a slightly weaker appreciation rate for greater Phoenix over the next couple of months, mainly due to weak luxury market sales in April and May. However, low demand would have to be prolonged and sellers would need to get desperate in order to have a strong negative influence on price. That hasn’t happened. In fact, low counts of new listings tells us that many sellers are keeping their homes off the market until the storm blows over.
This article was written by Angela Gonzales, Senior Report at The Business Journal. June 8, 2020.
