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Why Did Condo Prices Skyrocket?

 If Covid permanently shifted housing demand toward larger houses with more outdoor living space, shouldn’t condo price increases have lagged far behind single-family house price increases? Metro Phoenix Median Sale Price in April (YoY) That doesn’t support the theory that Covid changed housing demand and caused the Spring 2021 real estate mania. Covid may certainly have triggered the mania but it certainly wasn’t because Covid shifted demand away from condos and toward single-family houses. Market Disruption Followed by Price Inertia Maybe Covid mainly just temporarily disrupted the market and that triggered sharp price increases. The temporary sharp price increases, however, made people think there would be more sharp price increases…

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Why the Number of Houses Hitting the Market Fell in January and Prices Took Off Again

 I’ve been trying to figure out this market. In future posts, I’ll look at pocket listings, landlord purchases, and the foreclosure moratorium. I still couldn’t figure out why new listings were so low, especially in January when new listings were down 22% (from the 2018 – 2019 January average for single-family in Maricopa County). I mentioned the puzzle to a friend at Grand Canyon Title, Fletcher Wilcox, and he suggested the Covid resurgence in January might be a factor. The timing’s right. That seems to make sense. We haven’t seen, however, any catch-up in listings since January. New listings are getting back toward normal levels but no catch-up for the missed listings…

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Today – “These prices are crazy but they’re increasing so fast, let’s buy something ASAP”

 This summer will it become, “These prices are crazy, let’s wait and see”? My working theory is the Fed started the house price boom when they slashed interest rates again last year after cutting them throughout 2019. In addition, Covid increased demand for houses. In addition, Covid also cut spending on restaurants and travel so people were saving a lot more than usual. At the same time, the 3 stimulus packages may have helped some potential first-time homebuyers pay off their credit card debt, save up more down payment money, and generally become a bit more ready to buy their first house. But, I think, the second most important reason…

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If You Own a House with a “Challenge”, Now Would Be a Great Time to Sell It

 Kristin LaVanway makes a great point in this video at about 9:37 in. I was just thinking the same thing. I remember being surprised back at the top of the market in 2005 that prices for houses that backed to busy streets were about the same as houses that didn’t! The backyard is a lot less useable with all that street noise. Very few houses were for sale back then, like now. If you wanted to buy, you didn’t have many choices. In a normal market, you would have had a lot of choices so most people wouldn’t buy that noisy backyard unless the house was cheaper. I was surprised…

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