With the housing crisis fading in the distance behind us and the move into city centers’ taking hold, the Valley’s housing market is recovering just the way we want it to, according to Rebecca Grossman, President of the Scottsdale Realtor’s Association (SAAR).
“Anytime you have a housing market that’s recovering, what you don’t want to see is it recover too quickly,” she said.
Instead, she said you want slow and steady growth, the kind we’re seeing in our state now.
We sat down with Grossman after the Arizona Association of Realtors co-sponsored Forward Forecast 2016, a panel featuring national economists talking about the future of the Arizona housing market.
Here are the top five things you should know about our state’s housing market right now:
1. We’re avoiding volatility. And that’s a good thing.
Grossman said if the market recover’s too quickly, it could create an unstable market.
Before the crash, buyers were waiving inspections and offering to pay far above asking price for homes. And many of them found themselves under water as soon as the market faltered, Grossman said.
So, a slow and steady recovery is just what we need.
2. There’s more demand for housing than supply right now in the Valley.
“It’s very obvious to us that inventory is not satisfying the number of buyers who are out there,” Grossman said.
With a hearty job market, people are still moving here. And, at the same time, households that were consolidating during the recession are spreading out again.
Retirees are looking to downsize and millennials who moved back in with their parents after college are looking to move out, Grossman said.
“Now, we just need to meet them here now with housing,” she said, especially the affordable kind.
3. There’s still one problem: Not enough construction.
With all of that pent up demand on the market, we need more construction, according to Grossman.
She said it’s difficult right now for builders to get financing, particularly for smaller, more affordable housing projects.
At the same time, she said home builders are experiencing a serious labor shortage in Arizona.
A lot of laborers left the state during the recession and, now that those jobs are coming back, they’re hard to fill.
4. As the Valley becomes more urban, walkability is the name of the game.
The Valley is definitely turning away from urban sprawl and toward urban centers, according to Grossman.
So, walkability is at the center of the conversation in development right now. They’re focused on connecting communities to shopping and restaurants, she said.
“I think it has a lot to do with our awareness of the sustainability of continuing to just grow out and out and out,” she said. “Eventually, we have to bring people closer in so that we’re not using as many resources.”
But, in order to do that, we need rental and buying options in urban hubs, Grossman said.
It will be hard to get some cities to recognize that bringing people into the center permanently is important and will take work. “That’s going to take infill projects; that’s going to take redevelopment projects; it’s going to take a lot of zoning changes,” she said.
5. A lot more people are renting right now. And that may not be a good thing.
For one, more people renting means rental prices are going up across the Valley, according to Grossman.
For another, it means things are getting a little out of balance, she said.
“You have too many people that can’t own a home, so they’re renting, when that probably is not their first choice,” she said, often because they don’t have the credit score they need to get financing. That’s one of the biggest deterrents to buying right now, Grossman said.
Her advice? Establish credit and meet with a realtor to figure out what you qualify for when it comes to owning a home.