Arizona Tonight with Greg Hague

Arizona Tonight with Greg Hague

Talk about fun (and intimidating). Recently, I co-hosted (with Destry Jetton) a primetime special about real estate on NBC, just before Saturday Night Live.

I shared some fascinating data about our local real estate market, along with my personal insight as to whether the market is overheated, possibly on the precipice of a downturn. If you’d like to see the show, go to AzTonight.com.

Even if you don’t live in Arizona, this information should be relevant to you. Most markets around the country reflect the trends we’re seeing here. 

If you’d like to watch any of the four show segments, they are posted at AzTonight.com 

I had never before hosted a TV show. The process was new to me. They want you to arrive very, very early. First, you go into makeup (I asked them for youthful magic). Next they coach you on the timing of each segment, understanding hand prompts, and how to know which camera is live. 

The challenging part is having to deliver interesting content (smoothly and articulately) while wrapping up each of four segments (in a natural way) in about 5 minutes, 30 seconds. The typical length of a 30 minute TV show is 22 minutes (if you remove the commercial breaks). That’s 22 minutes exactly, to the second. 

So if I ran over or under in the first three segments the time differential was reflected in the time remaining for the fourth segment, which I had to wrap up exactly (to the second) on time. 

Three of my Hague Partners’ team (thank you Lindsay, Lauren, Sonal) dedicated two days to researching the Arizona real estate market (past and present) to prep me for the show. I covered a different area in each of the four segments. 

  • The state of Arizona real estate market
  • The proliferation of institutional flip buyers like Offerpad
  • The impact of  transient short-term daily rentals in residential neighborhoods
  • Innovations in real estate, including my 72 hour home selling program

Regarding the state of the local real estate market, here are the takeaways I consider most relevant: 

  • There are just over 14,000 homes for sale in the Phoenix metro market. This may sound like a lot, but not when you consider there are almost 2,000,000 homes. 
  • We only have a 1.9 month supply of homes for sale, the lowest in 12 years. This means at the current rate of monthly sales  (the average is just over 7,000), all 14,000 homes would sell in 1.9 months if no other homes came on the market.  
  • To put this in perspective, a 3-5 month supply of homes is considered balanced and healthy. In the 2008 downturn, we had a 13+ month supply of homes, the highest I’ve ever seen.   
  • One key reason so few homes are for sale isn’t because people don’t want to upsize, downsize, or move to another community, it’s because they are afraid to sell until they find a home they want to buy (which can be challenging with inventory being so low). 
  • This “afraid to sell before finding something” mentality is well illustrated by internal data from my firm, Hague Partners. Right now we have 47 homes listed for sale but not marketed until we find our sellers a home to buy. This is the highest number of “off market” listings we’ve had in 20 years. 
  • Is the real estate market overheated and on the verge of a downturn? The superficial metrics would so indicate. Our rapid home appreciation, fueled by low inventory, is exactly what we saw in 2005-2006, leading into the 2008 meltdown. 
  • But I don’t believe we are on the verge of a downturn. Why? Because when you look more deeply behind the metrics, this market is very different from the market leading up to 2008. 
  • Back then there was a disproportionate number of “false home sales”; people who bought homes to flip them, not live in them. 
  • The pre-2008 flippers were empowered by lax lending standards with low down payment, no income verification loans given to buyers with miserable credit. Also, some appraisers were giving lenders the appraisals they needed to make the loans.  
  • None of this is true today. Appraisers and lenders are careful and diligent. So the number of “mom and pop” flippers is appropriate to the size of the market. Most buyers are well qualified and purchasing homes for their families to live in. 
  • The bottom line is the real estate market in Arizona should be strong for quite some time (barring an unexpected “outlier” event). We had almost 90,000 people (net) relocate here last year. Our local economy is strong and should continue to strengthen. If this trend continues, economists predict that housing inventory levels will hit an all-time historic low by early next year. 

So what does this mean to you? Whether it’s a sellers’ market, a buyers’ market, or a balanced market, there are always challenges in selling/buying a home…. they’re just different. 

In a sellers’ market, it’s easier to sell. In a buyers’ market, it’s easier to buy. In a balanced market it’s semi-easy/hard to do both. 

What I’ve advised my clients for 40+ years? When it comes to your personal residence, make your decision based on what’s personally best for you, not on what’s happening in the market. 

“So many of our dreams at first seem impossible, then they seem improbable, and then, when we summon the will,
they soon become inevitable.”
– Christopher Reeves

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