Real estate markets to watch??

Question

Like all of you I keep my eyes on the real estate market.  This is fun for me but I also like to see if house prices are trending upwards or down etc.

I am in the Seattle area and have not noticed a considerable drop in prices.  How are prices in your area?

I recall seeing prices tank in Arizona, Vegas and Florida 10 years ago and they rebounded nicely.  If recession hits and real estate markets decrease, what areas do you predict will do the best?  I understand none of us have a crystal ball (unfortunately) but I am curious what your thoughts and predictions are (if you care to share;-).

Hope you all are healthy and doing well!!

Paul Welden · Answer

In Phoenix, Inventory is very low. currently at 13,878 active listings and demand from buyers is high. We need about 25,000 active listings to be a normal market.

Prices under $500k are holding steady and even increasing and properties under $300k usually sell within a few days with multiple offers.

Unless we get 11,000 properties dumped on us soon, I think the seller's market (low inventory) will continue and prices and values will continue to increase.

Jeff Piscioniere · Answer

@Brett Lee here in Connecticut things really never recovered since the downturn 10 years ago, LOL!  Why?  Because we have high taxes, lots of regulations, we’re one of the most pro-tenant states, and the resultant business climate is terrible. Don’t worry, I wasn’t one of the ones who voted for these knuckleheads.

Anyway, in CT definitely seeing fewer properties coming on the market, sitting on the market longer, but certain niches seem to be moving such as starter homes. My partner and I feel like things need to shake out for a few months to see what the direction is. We’re one of the states hit hardest by the virus and regardless seem to follow NY/NJ’s lead which will result in one of the latter economies to fully open back up. Bottom line is thousands of people are suffering financially right now and many of their employers that are shuttered right now are never going to make it back. So as an investor we might see an opportunity for people to no longer be able to afford their homes but can’t forget that there may also be a much smaller pool of potential renters. Right now lots of wait and see.

Whitney Hutten · Answer

It's actually not unheard of for home prices to rise in a recession.  There is more money in the system and rates are super low.  Those who can qualify for lending technically can afford "more home" and push prices.  If you look at the data, in the last 5 recessions, home prices rose in 3, was basically neutral in 1 (~1.5% decline), and we all know about 2008.  However, in my market in 2008, nothing went down... only flattened...

Will Fraser · Answer

Hey @Brett Lee!  Things are interesting to be sure!  Prices in Oh Kay See are stable for now, but there in an interesting bit of convergence in the works.  For all of the Shelter In Place period here the most common thing to hit the market were flips . . really shiny, pretty, nice flips.  This is probably because 90% of the would-be-sellers in the area were drinking the Kool-aide of "well, let's see what happens in a month", while flippers were thinking "Holly h#$%, I've got to get this thing sold before we find out what next month is going to look like."

This created a glut of homes in the "pre-flipped" price-range.  There was no in-between . . . things in the urban core were either not livable or they were beautiful, shiny flips.  Anything that went on the market in that middle range was snatched up fairly quickly with multiple offers.

Now we're seeing that "missing middle" find its way onto the market and things are starting to even out a bit, but considering it is May we are significantly behind pace of where we were in 2019 or 2018.

I guess the one thing you could say to that last sentence is . . . duh!

Haseeb M. · Answer

@Brett Lee

Interesting article on WSJ on this subject.

Home prices are actually rising!

https://www.wsj.com/articles/why-home-prices-are-rising-during-the-pandemic-11588671002

Filipe Pereira · Answer

I'm not too active in the flipping/renovation side of the market, but the rental demand is strong where we operate in CT and Western MA. MFR property values haven't decreased, and I don't expect them to. CT is poised to "reopen" starting May 20th, so I really don't think COVID-19 lasted long enough to get investors into anything near a panic mode. As just one example, we were going to list a 5 unit in East Hartford pre covid for 368K. We didn't list it because we expected serious pushback from tenants about showing the property, but now that things are turning around we plan to list it for the same amount. We have to keep in mind that before covid hit there was a LOT of money on the sidelines waiting to jump in. Even if the market began to decrease, I'd imagine there would be enough folks from the sidelines jumping in that would prop up the market for a while longer. I think it's unlikely we will see any kind of price reduction from this in the immediate future. 40-60 days just doesn't seem like enough of an impact.

Paul Welden · Answer

and the iBuyers are back in Phoenix!

Opendoor restarted its operations in Phoenix this week.

What does this mean for the Phoenix real estate market?1. Home prices could increase, because iBuyers are just flippers, but really don't rehab the properties2. Seller's agents will have more competition3. Smaller investors may have more of a challenge getting deals4. Inventory on the MLS could increase5. Buyers may have to deal with more sub-par properties

Never a dull moment in the Phoenix Real Estate market!

Alex Olson · Answer

Most of the activity in the market is impacted by lending standards which are becoming tighter on conventional loans (25% now rather than 20% last month). Also terms are shrinking. Make sure you check with your bank before thinking you can get it done.

Paul Shannon · Answer

I'm keeping my eye on markets that are most likely to be affected by COVID where I would want to own, but feel like the majority of the upside was had pre-2017ish.

Examples would be Las Vegas for single family rentals, or lake/mountain homes where VRBOs/AirBnbs are popular like Gatlinburg, TN.

Caleb Brown · Answer

Here in KC prices are still rising steadily along with rents. Haven't been slowed down.

Real estate markets to watch??

Most Popular Reply