2019 Arizona Housing Market Forecast

Transcription of Video

So I was recently asked to moderate an upcoming panel this November called the 2019 Arizona Housing Market Forecast for the Arizona School of Real Estate and Business. They asked me to write an article on the direction of the Arizona housing market. Something I do not take lightly.

I pulled research from Elliott Pollack’s arizonaeconomy.com, Michael Orr’s The Cromford Report, and Tom Ruff’s The Information Market, that analyzes all of the public records data that is then sold to the MLS for the use of all realtors. To dig deeper I reached out to friends who are commercial real estate experts, and a local real estate attorney. Here’s what I realized.


At the beginning of the last recession, in mid-2005, inventory started to rise but prices did not fall until mid-2007. So there was about a 24-month lag from when inventory went up before prices came down.

Right now, there’s 19,700 homes on the market. This time last year, there was roughly 21,000 homes on the market, so we’re still going down in inventory. It hasn’t started to go up, so that tells me that we’re at least 24 months away- IF history repeats itself.

Mortgage and Lending

Then another thing I looked at was the mortgage and lending requirements. In the previous recession, before things turned, we saw lending requirements go down. People could state their income, they could state their assets, and they could state all of this information, which was a big catalyst for the problems that came after.

Yet when you look at the last 18 months of closed loans, and the average loan to value (LTV), the debt to income ratios (DTI), and then the FICO scores, we’re seeing a flat line. It’s actually even, gone up a little bit. The average FICO score of closed loans in June of this year was 726, which was the highest number on that chart that looks back 18 months. So if a decline is coming, it’s not coming from that direction.

Available Cash Reserves

Then I looked at cash reserves, because during the last recession, people got caught without cash and there were all of these opportunities that were out there that nobody could take advantage of. Now it seems that people are being more prepared. On marketwatch.com they’ve got a chart that sources the FDIC, and shows the cash reserves from 2000, to 2005, and now to 2017. The difference between where we were at in 2005 to 2017 is 300%. The average across the country, went from $1,300 to $3,700 now. People are now sitting on more cash.

Population Growth

Maricopa County has been ranked the number one county in the country for net new people moving to it. In 2016 we were number one, 2017 we were number one (gaining about 75,000 new people that year), and we anticipate we’re going to be number one, if not in the top five again, in 2018. This continues to drive demand while keeping supply down.

What This Means

All in all, there are a lot of positive signs on what’s going to happen over the next three years for our Arizona Housing Market. There is definitely more to come about this. The article will be published in The Business Journal soon and I’ll make sure to share it with you guys once it’s live!

If you have any questions in the mean time, feel free to give us a call at the office- 480-500-1738

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