State of the Arizona Real Estate Market
February 4th, 2021
What We’ll Be Talking About:
- A look back at the real estate market in 2020.
- Is there a Window of Opportunity?
- Will Foreclosures Increase?
- Are We in a Bubble?
- Our “Watch List” Selling and Buying
The Tucson housing market was a shining star in 2020, fueling the economic turnaround throughout the country. As we look forward to 2021, can we expect Tucson real estate to continue showing such promise? Here’s what four experts have to say about the year ahead.
Robert Dietz, Senior Vice President and Chief Economist, National Association of Home Builders (NAHB)
“With home builder confidence near record highs, we expect continued gains for single-family construction, albeit at a lower growth rate than in 2019. Some slowing of new home sales growth will occur due to the fact that a growing share of sales has come from homes that have not started construction. Nonetheless, buyer traffic will remain strong given favorable demographics, a shifting geography of housing demand to lower-density markets and historically low interest rates.”
“We expect sales to grow 7 percent and prices to rise another 5.7 percent on top of 2020’s already high levels.”
“In 2021, I think rates will be similar or modestly higher, maybe 3%…So, mortgage rates will continue to be historically favorable.”
Mark Fleming, Chief Economist, First American
“Mortgage rates are expected to remain low for the foreseeable future and millennials will continue forming households, keeping demand robust, even if income growth moderates. Despite the best intentions of home builders to provide more housing supply, the big short in housing supply will continue into 2021 and likely keep house price appreciation flying high.”
• Real Estate is Resilient, Shows Strength
• “Home Life” has become “Home is Life”
• Historically Low Interest Rates Fuel Demand, and Refinancing
The Tucson real estate market is expected to do very well in 2021, with mortgage rates that are hovering at historic lows and forecasted by experts to remain favorable throughout the year. One challenge to the Tucson housing market, however, is the lack of homes available for sale today. Last week, the National Association of Realtors (NAR) released their Existing Home Sales Report, which shows that the inventory of homes for sale is currently at an all-time low.
If You’re a Seller:
Realize that, in some ways, you’re in the driver’s seat. When there’s a shortage of an item at the same time there’s a strong demand for it, the seller is in a good position to negotiate the best possible terms. Whether it’s the price, moving date, possible repairs, or anything else, you’ll be able to request more from a potential purchaser at a time like this – especially if you have multiple interested buyers. Don’t be unreasonable, but understand you probably have the upper hand.
• Listings Being Absorbed Instantly
If You’re a Buyer:
Be patient during your Tucson home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be prepared to make a competitive offer from the start, and know that a shortage in inventory could mean you’ll enter a bidding war. Calculate just how far you’re willing to go to secure a home and lean on your real estate professional as an expert guide along the way.
• Remote Working Has Untethered Geographic Ties
Whether you’re ready to buy or sell a Tucson home in 2021, if you’re planning to take advantage of the market this winter, let’s connect to talk about the opportunities available in our Tucson local market. Contact Don Vallee with Long Realty at 520-544-5555.