2019 Year-End Real Estate Review
2019 Stats for Maricopa County
All data pulled from ARMLS as of December 27th, 2019
10,094 – Total Homes Active on Market
6,964 – Total Homes Under-Contract
85,286 – Total Homes Closed/Sold
62 – Avg. Days on Market for Closed
$272,000 – January’s Median Sales Price
$300,000 – December’s Median Sales Price
Key 2020 Housing Forecast Trends
Interest Rates and Affordability: For now, mortgage rates continuing to hover just below 4% which continues with strong buyer demand. The Federal Reserve left its benchmark rate unchanged in their December meeting and signaled it plans to hold steady through 2020, barring unexpected economic news. All the members supported the decision to keep the rate in the 1.5% to 1.75% range. While the Fed doesn’t directly control home-loan rates, its decisions and forecasts influence the bond investors who do. If investors are willing to accept lower yields, that translates into lower mortgage rates.
Low Inventory & Demand: Despite the increase in new construction, inventory will remain low even with the small surge we see in January. Approximately 4.8 million Millennials will turn 30, which is when many of them will look to purchase their first home. The oldest members of that generation will be turning 39. They will account for more than 50% of the mortgages in 2020. The Luxury market is showing an average time on the market of 177 days with a 9 month supply of inventory, based on the last 90 day sales cycle. The Valley’s highest sales price this year was Robert Sarver’s home that sold for $19,250,000, owner of the Phoenix Suns.
Economic Concerns: Most economists have stated a recession is unlikely in 2020. But the economy will show signs of softening. A pull back in Business spending will lead to a slowdown of consumer spending. Lee McPheters of Arizona State University projected the Valleys population will grow by 110,000 people in 2020. And the state will add 70,000 new jobs next year. In an election year there will be candidates running for 35 of the 100 seats in the U.S. Senate, along with 435 seats in the House of Representatives. The 2020 elections will be closely watched by consumers and businesses for indications of potential changes.
In Summary: The Phoenix Real Estate and economy will continue to grow this coming year, just at a slower pace. Sales will be lower due to low inventory. Demand will continue to be solid due to low rates. One of the best articles I’ve viewed this year is a commentary from one of our top and most accurate resources–The Cromford Report. They put out a report in July Titled “2004 VS. 2019”. This compares 5 areas that are different in 2019 than in 2004 with the Arizona Real Estate market and the economy. Let us know if you would like a free copy of this report as it’s an extremely interesting read.
Have a great New Year!