This Week in (Greater Phoenix) Real Estate 10/5/2020

Every Monday I spend 15 minutes (or less) discussing what happened this week in real estate, lending, and the economy.

I apologize for the blurry video! I tried a new platform today.

Today’s Takeaways:

Breaking News:

Judge denied NAR’s motion to dismiss the class action buyer commission law suit filed 18 months ago. Expect more motions in the future. (Inman)

The AZ Market:

Supply: New listings have increased by 11% but they were absorbed as quickly as they arrived so our total inventory remains very low. As of yesterday, our inventory is 63.8% below normal. Active listings excluding under contract accepting backups (UCB) are still around 8,100 (we should have 25,000) down over 41% year over year.

Demand: Pending sales are up 25% year over year, huge despite our low inventory and time of year. Our demand is nearly 27% above normal. Demand rates slowed early in September and picked up some speed towards the end of the month.

National Real Estate:

In August we hit 6 million (seasonally adjusted annual rate) existing home sales. The last time we hit that number was December of 2006. Sales were up 10.5% year over year. This is particularly surprising since there were only 1.41 million properties (annualized rate) on the market in August, the lowest level on record, with limited data prior to 1999. (Matthew Gardner, Windermere Chief Economist)

The Fannie Mae Home Purchase Sentiment Index illustrates consumer confidence for buying and selling real estate. According to the most recent update, from August, consumers believe it is a good time to buy. The buyer consumer confidence index has fully recovered to pre-pandemic levels. What is interesting is that seller consumer confidence has not fully recovered. This is seen in our low inventory levels with continued high demand.

Many expect that when consumer confidence for selling fully rebounds is when we will see an increase in inventory. As sellers gain confidence and enter the market the extreme sales price appreciation will slow and buyers will have more choices. This will be good for buyers and for the overall health of the real estate market.

Real Estate News:

• Realtor.com and Rocket Mortgage announced an advertising partnership that directs buyers to Rocket Mortgage’s pre-approval application for a digital mortgage approval.
• Facebook announced it is working on a new augmented reality glasses project. Remember Google Glass? Similar but with newer technology. The project is several years from completion. Proptech investors are already planning on how to use it within real estate and property management. Starting in San Francisco and Seattle, Facebook has teams out collecting information via sensors gathering video, audio, and location data. Facebook is collecting data from inside buildings as well.

Forbearance:

For the 16^th straight week loans in forbearance decreased. They went from 6.93% to 6.87% dropping the number to roughly 3.4 million mortgages enrolled in a forbearance plan. (MBA)

Remind your clients that there are options to keep them in their houses.

Resources:

• Rental assistance is available through the Arizona Department of Housing website at saveourhomeaz.gov.
• The CFPB, FHFA, HUD, VA, and USDA created a joint effort mortgage and rental assistance platform, for more information visit https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/

Economy:

• College enrollment is down 2.5% year over year. During economic downturns, community colleges tend to see an increase in enrollment however, this year enrollment is down 7.5%. (National Student Clearinghouse Research Center)
• Personal savings rates have increased to 24% compared to early March when they were 7%. Bank deposits are up $2 trillion in 6 months. (Matt Stephani, Cavanal Hill Investment Management)
• Elliott Pollack expects that nearly all industries in Greater Phoenix will be fully recovered by the end of 2022 and that housing will continue being the strongest sector.
• Nationally, new business applications dropped from 27,000 a week to 18,000 a week from mid-March through mid-April. By early July they were up to 40,000 a week, the average is 22,500 a week. Applications have dropped since July but remain 20% above normal. This economy is driving entrepreneurship! (Elliot Eisenberg)

Please share this with your colleagues and clients.

Copyright 2020 by Sarah Perkins