Economist and housing expert Michael Orr commented on the impact of the COVID-19 virus by saying, “A number of people seem to assume that we are heading for a recession and that home prices will fall. The first assumption is quite reasonable. The second assumption is based on fear and has little analytical data to back it up. Obviously anything can happen in an uncertain and disrupted world, but a fall in home prices is still looking very unlikely from today’s numbers.”
Pricing changes based on supply and demand, and demand for housing is created by the existence of people. In 2005, supply was exaggerated as builders were building for futures – building for people who were at that point imaginary. In 2020, these people are real and migration trends have been quite favorable with new industries here and significant trends showing that Arizona population will continue to increase.
“With over 200 people a day moving into the valley and the East Valley being such a popular place to call home, and with the inventory being pre 2007 levels again, high demand for housing looks to continue for the foreseeable future,” said Kraig Klaus, Listing Specialist with the Klaus Team.
Even with unemployment resulting from COVID-19 and with people out of work for extended periods, housing needs will continue. Landlords may opt to evict tenants and sell. However, with low inventory, the extra supply would be a welcome presence in the market and the tenants would still need to find a new place to live. “There will be hardship, “said Orr, “but not a flood of homes with no-one to live in them.”
