No. At least not from what we can see at the moment. It’s true last year was slower than some, and it’s also true that so far 2019 has so far gotten off to a slow start. But a slow or stagnant market is not the same as a crashing market.
Few may have noticed the slow years of 2013 – 2014, which were very similar. Appreciation slowed, buyer enthusiasm waned, and sellers saw extended market times vs what 2012 had brought. But ultimately the fog cleared and prices began to rise again, leading into a strong 3 year seller’s market that is still going, though slowing again.
Here are a few basic reasons we don’t think Phoenix is in trouble:
- Phoenix Metro is still experiencing net population growth and job growth, so we don’t see demand slowing too much more than it already is. State economists are not predicting this to stop for Arizona anytime soon.
- Supply is historically low, so even though sales volume overall is a bit down, it still remains a sellers market in most areas in the Phoenix metro and therefore we are still seeing appreciation, though not as fast paced as 2016 and 2017.
- Short sales and Foreclosures continue to remain only a small fraction of the housing market.
Michael Orr from the Cromford Report also recently noted that there is not, as some claim, a historical link between rising interest rates and falling house prices, or even a link between sales volume dropping and prices dropping. What matters, as in any free market, is the relationship between supply and demand.
We are not the only ones who feel feel optimism about Arizona’s Housing Industry. Check out Catherine Reagor’s latest article. She is a great journalist who focues on Arizona Real Estate. We consume her content regularly.
Jonathan
