PHOENIX SUMMER 2020 HOUSING ANALYSIS: So, the data I’m seeing is that there are over 4.6 million people in the U.S. that are in some type of non payment (default or forbearance) on their mortgages representing 8.7% of all mortgages. That’s got to mean ‘housing crisis’, right?

Here’s the deal for all of you are waiting for values to completely crash so you can scoop up a deal….they won’t.

At least right now.

WHY? 🧐


One that nobody talks about as much as the doom and gloom of foreclosures.

IT’S AN INVENTORY CRISIS. We’ve been in an extreme housing shortage for many years. And it’s even worse now than it was in 2018 when I wrote this article. 👉

Back then we only had 13k homes for sale for more than 5 million people. This week, we only have 8k. I’ll say that again, we only have 8,000ish homes/condos/townhouses for sale for more than 5 million people in the Phoenix Metro. Apparently people are panic buying homes like they were toilet paper back in March. 😳🧻

What does this mean? It means that home values aren’t dropping, they are still on an upward trend. Simple supply and demand.

But wait, you just told me that there are over 4.6 million people that didn’t pay their mortgage. How many of those people are in Phoenix? 🤷‍♀️ I’m really not sure yet. Still need to get more data.

How could mortgage defaults affect the market?

From what I see in the data is that these people have a good amount of equity. And, there is a *CRITICAL* shortage in housing. So the options are:

1. The banks will continue to work with homeowners during the pandemic crisis and there won’t be an influx of foreclosures to create more supply.

2. People will sell to relieve the stress of a pending foreclosure. Since they have actually have equity, they can cash out to rent and stabilize their current financial situation.

If they sell, the market will quickly absorb their home with no negative affect on prices because we in an extreme inventory housing crisis.

In Phoenix, we need 30-40,000 more homes on the market to see any type of a balanced market. Remember we are critically low. We would need a 💩 ton more inventory (400% more) to see prices drop (more than 40k homes). At only 8k homes in our current inventory and thousands being sold every month, I don’t see increase happening anytime soon.

🥺 What would it take for the market to change?

1. IF interest rates start to go up. The higher the rates, the slower the market gets because of affordability issues. (Demand falls)

2. IF banks stop working with homeowners and foreclosure processes would start up. (Inventory increases)

3. IF more people lose their jobs and and no one would qualify for new mortgages. (Demand falls)

Did I miss anything? 🤯

Keep an eye on:
👉interest rates
👉the job market

If you need to sell a home during this low inventory housing crisis.

Selling during an inventory shortage will help you sell quickly & command top dollar. Learn more here:

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Amy Gerrish
Realtor & Analyst
Realty Executives