Eric Karlene

Eric Karlene

SA630328000 Certified Distressed Property Expert English
11211 N. Tatum Boulevard Ste. 120 Phoenix AZ 85028
(602) 492-2897

9/9 Market Update

By Madison Blean of Lawyer's Title - September 09, 2020

9/9 Market Update

National Real Estate:

Residential real estate is providing the most significant boost to the economy. While other industries struggle residential real estate is going gangbusters and is a part of the solution.

“Perhaps in the middle of 2021, we will have more semblance of a balanced market.”
Dr. Lawrence Yun, NAR

  • Matthew Gardner, Windermere’s Chief Economist revised his 2020 projections to 5.2 million sales and expects it would be much higher if there were more inventory.
  • 5.34 million homes sold in 2019. (NAR)
  • Dr. Lawrence Yun, Chief Economist for NAR believes 2020 will surpass 2019 in total sales and then significantly surpass 2019 in 2021. (NAR)
  • With the continued demand, significant lifestyle changes, and incredibly low supply Yun does not believe we are in a bubble. The increase in builder permits is a sign of inventory to come which will help keep price appreciation in check.
  • Pending home sales increased from June to July by 5.9% and are up 15.5% year over year. (NAR)


The AZ Market:

Local economist Elliott Pollack states that the Phoenix metro housing market will remain strong. Between the strength of our job market, affordable prices, stability, and good weather people will continue to move here from other parts of the country.

Cromford Market Index (CMI): Is the best leading indicator available (balance is 100, above 100 is a seller’s market, below 100 is a buyer’s market, prices rise at 110, and drop at 90). Last week the CMI was 342.6, over 100 points above the pre-COVID peak of 241 and nearly 200 points above the 145.2 we hit on May 15. The past week saw a 1.5 point increase, a far cry from the 20 point increases we saw in June.

Supply: Inventory remains low but has stopped dropping. As of last week, our inventory is 64.4% below normal. Active listings excluding under contract accepting backups (UCB) are at 8,000 (we should have 25,000) down 40% year over year and down over 3% month over month.

Southeast Valley New Listings: This a bi-weekly comparison of new listings in 2019 and 2020 for Tempe, Mesa, Chandler, Gilbert, Apache Junction, and Queen Creek. 2019 followed the typical annual cycle showing more activity in the first half of the year. 2020 is not following any typical patterns.

Demand: Pending sales up 18% year over year, huge despite our low inventory. Our demand is over 22% above normal. The demand continues to rise but at a very slow rate.

Sales & Prices: Phoenix metro area closed sales are up 1% month over month and up over16% year over year. The median sales price is $325,000, up 14% year over year. Healthy appreciation is 3% annually.

Commercial Real Estate:

  • About 25% of New York City office employers are reducing their office space by 20% and 16% are moving out of the city. (Bisnow)
  • After 10 years of declines and closures, 2020 is especially bad for American malls. Coresight Research expects another 1,000 malls or roughly 25% of remaining malls to close in the next five years.
  • Department and apparel stores are taking the biggest hit with revenue declines of 200% and 150% respectively. (Moody’s)
  • Retail owners have started the eviction process for many tenants nationwide. (Wall Street Journal)
  • 77% of retail tenants are current on their payments, better than the 54% who made payments in April. (Wall Street Journal)
  • 28% of industrial California companies are looking to expand or move to Phoenix, up from around 18% last year. (Phoenix Business Journal)
  • Despite eviction moratoriums a recent survey of civil rights and legal aid attorneys found that 91% reported illegal evictions taking place throughout the country. (National Housing Law Project)

Real Estate News:

The Centers for Disease Control and Prevention (CDC) instituted a temporary national residential rental eviction moratorium through 12/31/2020. The CDC has the authority implement such measures to prevent the spread of COVID-19. (Forbes)


  • Individuals must earn less than $99,000 a year or couples filing jointly $198,000 or less.
  • Received a stimulus check this year.
  • Certify inability to pay rent is due to COVID with evidence of previous support applications.
  • Show that they would become homeless if evicted.

Unintended Consequences?

  • This only delays eviction; it does not prevent it.
  • The order does not prevent additional fees, penalties, or interest from being added.
  • NAR President Vince Malta and National Multifamily Housing Council President Doug Bibby both spoke out against the moratorium stating without additional funding both landlords and renters will suffer.

“While NAR appreciates and is supportive of administration efforts to ensure struggling Americans can remain in their homes, this order as-written will bring chaos to our nation’s critical rental housing sector and put countless property owners out of business.”
Vince Malta, NAR President

Other Real Estate News:

  • NAR membership is up 2% year over year and increased 1% from June to July. Membership is now a record high of 1,409,727. (NAR)
  • Pinterest will pay $89.5M to get out of its 490,000 square foot lease in San Francisco. Their post-COVID plans include hiring talent without location restrictions, i.e. working from home anywhere.
  • Last December California’s state insurance commissioner instituted a 12-month ban on insurance companies from canceling homeowner insurance policies on properties in and around recent wildfire locations, protecting roughly 800,000 houses. The ban is not renewable and no new agreement has been reached. High cost, low coverage insurance is available to those who cannot get private insurance coverage. Yet another reason more Californians move to Arizona daily. (New York Times)
  • Zumper, a digital marketplace for rental housing launched Rent Guarantee, a program that helps small landlords by guaranteeing up to 12 months of rental payments. (Inman)

Mortgage & Forbearance:

Mortgage rates have a greater impact on American borrowers than does a recession. Let that sink in, the reason our real estate market continues to appreciate with such intensity is because the buyers are still coming to the market. They do so because of the affordability created from low rates. If you look at interest rates during the past recessions, when they dropped, real estate appreciated. During the tech bubble recession during 2000/2001 homes appreciated by 6.5%. (Ivy Zelman)

The recent Federal Reserve changes include Chairman Powell saying he would let inflation rise to about 2% in order to keep rates low and promote job growth without inflation fears. Given that bonds and inflation are arch enemies and the FED is the largest buyer of bonds, the FED has the control. (Federal Reserve)

Mortgage purchase applications stayed flat week over week but are up 28% year over year. Refinance applications dropped 3% week over week and are up 40% year over year. Refinance applications made up 62.5% of all mortgage applications last week. (MBA)

After 10 weeks straight of decreases, loans in forbearance stayed flat this past week. 7.2% of mortgages are in forbearance which is roughly 3.6 million loans. (MBA)


The American economy added 1.4 million jobs in August bringing the national unemployment rate to 8.4%. This is the first time it has been below 10% since March. (Department of Labor)



  • Unsurprisingly tourism has taken a GIANT hit with estimated losses of $341 billion since March. (New York Times)
  • Hospitals are struggling as elective procedures are cancelled. It is expected that hospitals will see losses of $323 billion from March through December. (American Hospital Association)
  • Telemedicine is way up. Before March about 11% of patients used telemedicine, today 46% of patients are using telemedicine. (Bisnow)
  • Supply chain disruption is subtle but real. Prior to COVID about 6% of consumer goods were out of stock at any given time. Today 21% of paper products, 18% of household cleansers, and 18% of canned vegetables are out of stock. Do not worry, grooming supplies are at all surplus with only 4% of products are out of stock. (Elliot Eisenberg)

Final Thoughts:

Real estate continues to thrive despite significant headwinds. Home has never been more important and for the 160 million employed American there are options.


thank you

Madison Blean

Sales Executive

Lawyers Title

225 E. Germann Rd #130

Gilbert, AZ 85297


Member of a Fortune 500 Company



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