Like all other commodities, the real estate market is constantly going through a metamorphosis that is affected by a slew of factors – both direct and indirect. Let’s help to realign your perception regarding the current state of affairs by covering 5 ways Phoenix real estate has changed in the past few years.
One of the most obvious issues we are experiencing in 2021 is the continued low inventory of for-sale homes.
The Covid-19 pandemic that began in early 2020 put a major damper on the market as a whole, but things are certainly getting back to where they once were prior to the elevated health risks. With consumer confidence and comfortability with a new normal rising, buyers are getting out there and trying to find their next home while the opportunity is there.
This still leaves the issue of owners very slowly deciding this is a perfect chance to put their home up for sale and cash in on the low supply and high demand. Another area to keep an eye on is the difficulty of new construction keeping pace with the demand for homes coupled with the temporarily inflated prices of construction materials that are finally beginning to diminish.
Increased Values and Volatility
Another area that has been thrown for a loop over the last couple of years is perceived market stability.
Low home inventory has led to skyrocketing market values of homes across the country, and it shows few signs of stopping anytime soon. However, market elasticity is holding strong as lenders are continuing to issue loans with lowered interest rates in part thanks to the moves made by the Federal Reserve throughout 2020.
We are expected to see inflation as manufacturing and logistics sectors ramp up productivity following recovery from the pandemic, but hope interest rates will remain low in order to maintain this surging demand for homes.
Wants and Needs Have Changed
As a new generation is entering the target consumer demographic, business and marketing strategies are adapting across the board.
Technological advances that they have grown up with have been normalized in popular culture, and this has shaped the way they live their day-to-day lives. A concrete example is the increased interest and use of home security equipment, whether a simple doorbell camera or a multi-camera wi-fi setup.
This doesn’t mean someone selling a property needs to implement a full security suite before putting the home on the market; however, having a smart thermostat installed and then highlighting the ease of installing a camera system certainly can’t hurt.
While there is definitely still a niche market for the stereotypical home with a white picket fence, this now lingers as more of a specter than an aspiration.
To some, this iconic image of Americana remains a goal while others see it as a rapidly dissolving image of days long gone or even a symbol of social stagnation. The bottom line is that a home focused on function and practical design has begun to overtake the perceived American dream home in terms of desirability.
The time of the classic Realtor exclusively representing other clients is taking a hit as more agents are choosing to reinforce their available portfolio with their own investment properties.
Online investment platforms – referred to as iBuyers – make selling a home very straightforward for owners looking to complete a transaction quickly. What was once an area of the real estate market occupied almost entirely by flippers a decade ago has now become a global enterprise.
The 2008 financial crisis and 2020 Covid pandemic both showed that investment in real estate was ultimately one of the best options available in order to retain value if not increase returns.