This year has been nonstop uncertainty. The coronavirus pandemic led to shutdowns and major changes to our everyday lives. Those changes are likely to continue as we head into winter. Cities have been hard-hit, not only in terms of public health, but also economically.
Despite everything, the housing market is one thing that's been consistently strong this year. So, what will next year bring? Will that positivity hold steady, or are we in for a bust?
If inventory remains low into early 2021, it's possible that home prices will continue to go up. The median asking price for properties in Queen Creek for November 2020, according to ARMLS, was $514,900. That's up 20.61% compared to November of last year. New listings are only down about .9% YTD, but average days on market are down 49.09%. Which indicates that new listings are still about average YTD, but homes are selling in half the time (this also takes into account homes under contract with extended closings). November indicated a 47% decline in new listings as compared to November of 2019. With builders holding back lots due to higher material costs and sellers having a challenge selling and buying a new home due to the shortage of inventory, this could cause inventory levels to continue to trend downward. Typically, increased demand and a dwindling supply are great for sellers but not so much for buyers. This can have a negative effect if the sellers are now the buyers.
Suburbs Reign Supreme
There has been a shift in interest away from urban areas, as many people are packing up to find homes with more space and less proximity to others. Some of the most popular areas in 2020 across the United States have included Colorado Springs, CO; Reynoldsburg, OH; and Rochester, NY. We could see continued flight from urban areas to suburbs in 2021. This holds true to the densely populated areas of Phoenix, zero lot line homes, or apartment communities in which people are flocking to the more open areas and larger lots in Queen Creek.
Despite all of the headwinds and what feels like a barrage of negative information, there is some optimism in housing starts. Consumer confidence was high last quarter, and builder sentiment similarly seems to be at an all-time high.
Could There Be Downsides?
While there are some indicators of positivity, there are also potential negatives that could come into play. Unemployment numbers are still high, and rolling lockdowns throughout the winter could cause those numbers to rise. Some predict that foreclosures could also rise as a result. When facing uncertainty and anxiety, there's a tendency among consumers and would-be homebuyers to hoard their cash. Personal savings rates have actually gone up recently, but that means there may be less spending going on, particularly on bigger items like houses. Finally, while there are some unnerving indicators, we do know with almost certainty that record-low mortgage rates will hold. The fed has signaled their intention to keep rates low for the foreseeable future.
The right plan
Now more than ever it is important to have the right agent that understands the market and your goals. In some cases, the right offer includes the right terms and not necessarily the highest possible price. While your return on investment is important and so is maximizing your value, there are other factors to consider. In some cases, having an extended closing timeline with a cash offer may save you from having to lease back your current home, double moves, and the cost of a short term rental. Simultaneous closings on your new home with less risk from your buyer. Does your buyer have the financial stability to close? What other factors go into making the sale of your home smooth while still bringing you a high return. If you simply want to get the highest return possible on your home, we can make that happen as well. We are here for you. Contact your AZ Real Experts today for a personalized marketing plan that will leave you completely satisfied at closing.