As Arizona enters into the summer months and we work through the challenges associated with the current health crisis, many are wondering what impact the economic slowdown will have on Surprise AZ home prices. Looking at the big picture, supply and demand will give us the clearest idea of what’s to come in Sun City Grand and Surprise Farms.
Making our way through the month of June and entering the second half of 2020, we face an undersupply of homes on the market in Surprise AZ Bell West Ranch. Keep in mind, this undersupply is going to vary by location and by price point in Arizona. According to the National Association of Realtors (NAR), across the country, we currently have a 4.1 months supply of homes on the market. Historically, 6 months of supply is considered a balanced market. Anything over 6 months is a buyer’s market, meaning prices will depreciate. Anything below 6 months is a seller’s market, where prices appreciate. The graph below shows inventory across the country since 2010 in months supply of homes for sale.
Robert Dietz, currently the Chief Economist for the well known National Home Builders Association (NAHB) has this to say:
Given the undersupply of Arizona homes on the market today in 2020 mixed in with some low rates, there is upward pressure on prices. Experts have seen this in Surprise AZ. Looking at simple economics, when there is less of an item for sale and the demand is high, consumers are willing to pay more for that item. The undersupply is also prompting bidding wars or multiple offers, which can drive price points higher in the home sale process. looking at a recent Market Watch article:
In addition, experts forecasting 2020 Arizona home prices have updated their projections given the impact of the pandemic. The major institutions expect home prices to appreciate through 2022. This includes areas in Surprise such as Sun City Grand, Arizona Traditions and Sierra Montana homes for sale. The chart below, updated as of earlier this week, notes these forecasts. As the year progresses, we may see these projections revised in a continued upward trend, given the lack of homes on the market. This could drive home prices even higher.
Many may think AZ home prices will depreciate due to the economic slowdown from the coronavirus, but experts disagree. As we approach the second half of this year, we may actually see home prices rise even higher given the lack of homes for sale.