As 2019 is here one of the biggest questions we hear these days is “Where is the housing market headed?” Although nobody has a crystal ball there are economic indicators which we track and of course we study history. Debbie and I were lucky enough to sit down and meet with Fletcher R. Wilcox and review the market. Fletcher is the vice president and real estate analyst for Grand Canyon Title and author of the Wilcox Report. The biggest take away from our meeting is that he is comfortable with the direction and pace of the local real estate economy. The fears we hear are hoping that we don’t have a crash like we did 10 years ago. That isn’t a realistic concern based on where the lending market was then and the regulations that have taken place since, and the real estate appreciation we see now is much more gradual and sustainable than in the late 2000’s. Those of you who were around back then remember when the bottom hit- the pools were greener than the common area grass. Historically the bottom was hit August of 2011, them then until October of 2013 showed the fastest appreciation. This was partially based on the fact that at that time there were more cash sales than bank loan transactions, so without appraisals the prices were only regulated by what a buyer would pay.
So what pushes our housing market? Housing is a commodity susceptible to the pressures of supply and demand. Arizona is a growth state. Maricopa County is the fastest growing county in the US gaining 202 people a day. Wallethub did a report on the top job growth cities in the US. Phoenix metropolitan area had 4 out of the top 5! With Peoria 1, Chandler 3, Scottsdale 4 and Gilbert 5th. Maricopa County generates 151 jobs a day; Arizona’s wage increase of 4.8% was the third highest in the country. The influx and people and jobs produces a need for housing. Housing prices have been increasing between 6 and 8%. The Fed is talking about raising interest rates but historically, rates are comparable to the rates back in 2011, which was the bottom of the housing market. Rates are in general still well below historical averages.
Whenever we talk about a market the more hyper local we can focus the more accurate we can be. National news or statistics do not reflect local economies. Over the years I have seen how weather effects or markets laughing that our winter snowbird season can be forecast with the Farmers Almanac when looking at what the Midwest temperatures will do. The colder the weather the stronger the desire to warm up!
We hope you found this informative if not at least thought provoking. We appreciate the opportunity to be your local resource for your real estate questions. Thank you for considering us when it comes to your real estate needs