This page is completely designated to information surrounding how COVID-19 is impacting Real Estate here locally, throughout the Phoenix Market.
Updates continue to be posted and edits will be made as information changes. There is a lot of different information contained throughout this page so please scroll down to see what is available. The whole situation is something unprecedented so we are all learning together. Please never hesitate to reach out with questions more individualized for your circumstances or if you need help in another way. We are here for our community!
BLOG UPDATE – 4/9/2020 – Click HERE to read.
Video Update – 3/31/2020
Video Update – 3/17/2020
Mortgage Forbearance:
A lot of people are talking about this, but not all situations are the same. Not every loan fits into the same category so options will differ. I created a video to explain some of the nuances to be aware of. Remember, ALWAYS GET THE FULL TERMS IN WRITING before agreeing to anything.
Here are some notes to be aware of…
- Temporarily Suspends, Lowers or Defers Payments for a Specific Period of Time
- Repayment could become a single Balloon Payment, Deferral to the Back of Loan or Spread over Time
- Fees and/or Penalties may apply
- The Lender/Servicer may Report to the Credit Bureaus, which could Negatively Impact your Credit
Recession does not equal Disaster…
Nobody has the magic crystal ball to know how this all shakes out economically. The speculations vary significantly from a total collapse to we will be back to normal in 30-60 days and everywhere in between. Personally, I believe it will take many months for the picture to unfold on what all impact the shut-downs and layoffs will have. I do not believe a total collapse is on the horizon, but many are being impacted. When looking at the local real estate market here in Phoenix, we’ve been operating in such low inventory & high demand conditions for so long that this may get us back to a more “normalized” and even marketplace, which wouldn’t be a bad thing. Hard to tell just yet, but activity has not stopped. Real Estate services were deemed ‘essential’ so transactions are still closing. Some are holding off on placing their home for sale and many home buyers have hit the pause button temporarily while in-home showings are discouraged.
A recession is defined as: “A significant decline in economic activity as consumers and business spend less money”. Many economists label a recession when you have two consecutive quarters of declines in GDP (gross domestic product). Well, under the current circumstances, of course less money is being spent so a ‘recession’ isn’t unlikely, but again, that doesn’t have to mean a collapse of the economy or housing crisis. What we experienced in 2008-2010 was VERY different than what is occurring today.
Mortgage Financing Volatility
This pandemic has indeed caused a lot of friction and instability with regard to mortgages and financing. In early March we saw Interest Rates drop to record lows… some even in the 2’s for 15-year refinances. That was short-lived, however, as overwhelming demand caused lenders to become inundated and artificially push rates up to slow the rush. Then the CoronaVirus really hit and that caused market uncertainty, which pushed rates further… even into the mid 5’s. They have relaxed back down some, but it’s been a roller coaster with various programs being withdrawn and suspended including Jumbo Loans and Down Payment Assistance Programs. This doesn’t mean all are gone, but the options more limited with costs increased. Belief is that in the coming months, rates will continue to settle back down and become very favorable. Market confidence is a key component to this. Some additional explanation is provided in a Video by Dave Krushinsky, owner of DK Home Loans… you can watch HERE. Another Video explaining what’s happening in the world of financing is available HERE also, which was shared by Jason Servais, a loan officer with On Q Financial.
We Haven’t Bailed on our Clients
Due to the challenges being navigated currently, pretty much all the “iBuyers” not only stopped buying homes, but also pulled out of existing purchases in motion. This has left quite a number of people left hanging in the balance with additional fallout on their next home purchase that was contingent upon closing of the existing home. On the other hand, we have worked tirelessly and with some restless nights, in order to keep our client’s transactions moving along. It’s been very stressful with more curve balls thrown each day, but we stand firm and keep moving forward. As mentioned in the beginning of this post, we are all learning together… this has never happened before. No matter what the information is, we will always assess it and then deliver guidance and options so our clients make the best decisions for themselves. Our interests are NEVER put above our clients’.
Relief & Help is Available
The federal stimulus package is in motion… to find out what you may be receiving, click HERE to use a Stimulus Calculator.
If you’re a Small Business Owner, you may be eligible for a Loan, Grant or other assistance… Learn more HERE.
Some additional resources for Housing / Mortgage Help are contained HERE.
What Can We Learn from This?
I think a few bright spots could come out of this ordeal…
- More emphasis on family and a re-prioritization of what’s truly important in life will come into focus.
- People will SAVE more $$$… hopefully more of the general public will stop living beyond their means.
- A greater appreciation for Schools, Teachers, Administration & Staff… homeschooling is no joke!
- New Skills & Techniques will be learned by many throughout the workforce, which will lead to greater efficiencies and flexibility in the future.
- The Food Banks will benefit this fall when those whom hoarded 65 cans of green beans weren’t able to eat half of them.
- People will wash their hands more!
Additional Links
Blog – Market Update – March 23rd, 2020 – Click HERE to read.
Blog – Market Update – April 9th, 2020 – Click HERE to read.
