2020 Housing Market has No Similarities to 2008

Supply and Demand are completely opposite from the last big housing recession

Supply & Demand in the Phoenix Metro Housing Market September 2020
Today’s above normal demand and below normal supply are opposite of 2008.

The adverse relationship between Supply and Demand in the U.S. Housing Market today is opposite as compared to the conditions back in 2008. There are no similarities in today’s market to those 15 years ago. In 2005-2008 we had over 100% more homes than normal, and today we have a 63% shortage. Back then we had negative demand, while today we have bidding wars, especially in homes under $400,000.

Today’s buyer is different too

Today’s buyer is looking for a home to live in, to work in, and perhaps to start a family. That was not the buyer of 15 years ago, when investors bought homes sight unseen for rental potential. Low interest rates and housing affordability are enticing first time home buyers, renters, and millennials. Homebuilders, re-entering the market with trepidation post-2009, had not anticipated this just a few short years ago.

The “New Normal” needs a larger home

The Covid-19 pandemic has increased demand significantly. “Live, Work, Play” means more time is spent at home as offices and schools close for much longer than originally anticipated. In addition, households are growing larger as elderly relatives and adult children and grandchildren are blended into the household. Homeowners are using the low interest rates to pay the same monthly nut for a much larger home. Priorities have shifted as families shelter together to meet social distancing guidelines.

What to look for when expecting a housing market correction: When appreciation slows. p.s. The market is not shifting yet

September 24, 2020 Full Market Report

See this month’s market report as reported from The Cromford Report, Arizona’s most respected source, located on the campus of Arizona State University. STATISTICS CLICK HERE

About the Author: Denise van den Bossche has been a licensed Agent and homeowner for over 35 years in the Metro-Phoenix Scottsdale Valley of the Sun. Legacy LEED® AP, designated SRES, DMX, ePro, EcoBroker and co-founder of Seniors Advisors Advising Seniors®, a consortium of experts to surround and support families facing aging or chronic illness. To request a no-obligation market report, home evaluation, or consumer guide on your specific needs, contact Denise at 602.980.0737 or email  Denise@AZMultipleListingService.com.  Denise’s husband Patrick is President of Realty Executives International, with 500 offices throughout North America.

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August 2020 continues a Housing Market Frenzy

For Buyers:

The first few weeks of August saw a surprising 17% spike in listings under contract over $600K. This is highly unusual as typically contract activity declines in the 2nd half of the year, especially on the high end; but this is the year 2020 and it’s been full of surprises. What is causing this spike in buyer demand in the luxury market? Luxury sales are partially influenced by stock market performance and corporate profits. August was a good month for the stock market, but the 2nd quarter was not good for corporate profits at all. In fact, they fell to levels we haven’t seen in a decade. The answer may lie in what’s been dubbed “wealth flight”. Some states like California are considering increases in income taxes, corporate taxes and a new “wealth tax” in the wake of the pandemic. As a result, the threat of new taxes on already hurting balance sheets is enough for companies and their employees to make the decision to move. This, coupled with the work-from-home movement, is fueling demand in Metro Phoenix where taxes and the cost of housing are comparatively more affordable than other cities. For buyers waiting for prices to decline, there is no indication of that happening soon despite apocalyptic predictions of another foreclosure wave; at least not while the Valley has a net increase in population moving to the area. A reasonable expectation over the next year is that prices will continue to rise sharply in the short-term, then possibly rise slower if affordability rates begin to suffer. The only beam of hope for buyers right now is a boost in new construction.

For Sellers:

For at least 12 years, builders have been reluctant to ramp up production of new housing supply to accommodate population growth; which is understandable considering they were burned severely when the housing market crashed in 2008. This reluctance has led the market to our current shortage of homes for sale and a frenzy of competition for existing resale homes. However, last July saw over 3,000 single family permits filed; the largest number filed in a month since March 2007. This should provide some much needed relief for buyers and some added competition for sellers in the coming months. While exciting, this increase in new home permits is not alarming. The biggest month recorded was July 2004 with 6,291 permits filed.

That said, 35% of homes closed through the Arizona Regional MLS in August sold over asking price. As incredible as that sounds, this is not the first time Greater Phoenix has seen this measure spike. In fact, 2005, 2009 and 2012 all saw higher percentages; each peak was short-lived over the course of just 2-3 months before sharply dropping again. This is because as more sellers test market limits and ask for higher and higher prices, their likelihood of selling over asking price drops significantly.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2020 Cromford Associates LLC and Tamboer Consulting LLC

June 2020 Employment Report Released August 20 from the Arizona Commerce Authority

June 2020 Employment figures released

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Election Year Effect on Interest Rates

The strength of the housing market in the U.S. continues to benefit the economy, with no indication of an impending crash like we saw in 2008. Demand for homes are partially due to low interest rates. Will rates be effected by the election? This graph demonstrates that election years did not have much effect on rates.

This graph demonstrates that election years did not have much effect on rates.
Election Year typically doesn’t effect interest rates. Chart provided by The Cromford Report

Note that those years that were effected had underlying causes that were unrelated to the elections: In 1980, if you’ll remember, Greenspan had much pressure to raise rates. the other biggest election year of 2016, Mortgage backed securities shifted significantly due to law changes.

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Sick buildings compromise healthy people

woman wearing mask
Are you Compromising Your Health by Sheltering in a Sick Building?

What is a healthy building, and why should that be important to you? Sick buildings compromise healthy people. Most of us are aware that hospital stays can and do cause illness unrelated to the reason the patient came for treatment. This frequently results in devastating issues for those with compromised immune systems. This can be even more critical when searching for a retirement community.

And indoor air quality and proper ventilation are just the beginning of a healthy environment.

LEED® certification was partially in response to “Sick Building Syndrome.”

Denise van den Bossche, Legacy LEED® Accredited Professional

Leadership in Energy & Environmental Design® (LEED®)

LEED® is the most stringent of all certifications for both commercial and residential structures. Achievement of the LEED Accredited Professional® (LEED® AP) designation, is to qualify by experience, as well as pass one of the most difficult professional business exams.

LEED stands for Leadership in Energy and Environmental Design®, a designation managed by the U.S. Green Building Council. Far more stringent than any other designation, credential or “green” design, the vast majority of professionals who have achieved LEED AP status are licensed practicing Architects and professional designers. Keep in mind that sick buildings compromise healthy people.

For Seniors, housing selection can mean life or death

Most people do not hire an architect to accompany us while we explore housing options for our loved ones, there are many factors involving building health that you should consider. You need to know the questions to ask and the issues to look for when it is your turn to select accommodations for a loved one in need. Make sure you work with someone familiar with issues unique to those over 50 years old. A NAR® designated Senior Real Estate Specialist® (SRES) is a good place to start.

About the Author: Denise van den Bossche has been a licensed Agent and homeowner for over 35 years in the Metro-Phoenix Scottsdale Valley of the Sun. Legacy LEED® AP, designated SRES, DMX, ePro, EcoBroker and co-founder of Seniors Advisors Advising Seniors®, a consortium of experts to surround and support families facing aging or chronic illness. To request a no-obligation market report, home evaluation, or consumer guide on your specific needs, contact Denise at 602.980.0737 or email  Denise@AZMultipleListingService.com.  Denise’s husband Patrick is President of Realty Executives International, with 500 offices throughout North America.

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Phoenix Home Appreciation Remains Hot

Arizona home prices are among the nation’s fastest-rising

Arizona scored the second highest state for home price appreciation according to the recent Federal Housing Finance Agency House Price Index data release on 8/25/2020. While home appreciation national average was a robust 5.4, Arizona home prices appreciated 9.1% in the second quarter 2020. Idaho was the highest at 10.8 percent and all states had positive one-year changes based on the 2019 comparative quarter. Phoenix Home Appreciation expected to remain Hot into the fall months as Maricopa County continues to attract families, seasonal homeowners and retirees.

Home Values
Truth or Myth: What does it really cost?

Phoenix continued to have the highest home appreciation gains for the 13th consecutive month in the S&P CoreLogic Case-Shiller Index with an over-the-year increase of 9.0 percent for June 2020. Seattle and Tampa followed Phoenix with 6.5 percent and 5.9 percent increases, respectively. Phoenix Home Appreciation Remains Hot.

Local Market Update

It is more than the weather that’s HotFromPhoenix: Watch my monthly market update with the charts and graphs here. Charts provided by The Cromford Report, Arizona’s most trusted source of residential market statistics. Charts cover Phoenix Home Appreciation, Listing Shortage, Buyer Demand and Historical Low Interest Rates.

Golden Nest Egg for Retirement
For Seniors, Home Appreciation adds years to retirement income

About the Author: Denise van den Bossche has been a licensed Agent and homeowner for over 35 years in the Metro-Phoenix Scottsdale Valley of the Sun. Legacy LEED® AP, designated SRES, DMX, ePro, EcoBroker and co-founder of Seniors Advisors Advising Seniors®, a consortium of experts to surround and support families facing aging or chronic illness. To request a no-obligation market report, home evaluation, or consumer guide on your specific needs, contact Denise at 602.980.0737 or email  Denise@AZMultipleListingService.com.  Denise’s husband Patrick is President of Realty Executives International, with 500 offices throughout North America.

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August 2020 Phoenix Metro Real Estate Update

From Cromford Associates, on the campus of Arizona State University, Arizona’s most respected source, this month’s Real Estate Market Update.

For Buyers:

It’s a jungle out there for buyers, but despite recent appreciation rates the HOI* measure for Greater Phoenix increased to 64.8 for the 2nd Quarter 2020; the previous measure was 63.0. This means that a household making the current median family income of $72,300 per year could afford 64.8% of what sold in the 2nd Quarter of 2020. By comparison, the HOI measure for the United States was 59.6.

Historically, a normal range for this measure is between 60-75. During the “bubble” years of excessive appreciation between 2005-2006, the HOI plummeted from 60.1 to 26.6. Typically if it falls below 60, the market should start to see a drop in demand. With the most recent increase however, Greater Phoenix is still within normal range and experiencing demand 20% above normal for this time of year.

What makes this market significantly different from the infamous bubble and crash is the relation between resale housing growth and population growth. In the early 2000’s, housing was growing faster than the population and creating a glut. This glut went unnoticed due to excessive speculator (i.e. “false”) demand fueled by loose lending practices. When loans tightened up, the glut came roaring into focus as vacant inventory soared to over double the normal levels. However since 2006, the population has grown faster than housing. It has taken 14 years, but this population growth fueled by job growth has finally consumed the glut of re-sale housing created during the bubble years and now the market is facing a shortage of homes for sale.

This type of market and appreciation is not sustainable over time, however it’s here now and properties purchased today are expected to continue appreciating over the next 6-12 months.

For Sellers

So much for the “Summer Slowdown”, July had a record number of closings go through the Arizona Regional MLS; surpassing every July as far back as 2001. July also broke records in dollar volume with $3.9 Billion sold. The best July ever recorded prior was in 2005 at $2.9 Billion. The monthly appreciation rate finalized 12.5% higher than 2019 and was the 4th highest appreciation rate for July going back to 2001.

One third of homes closed were over asking price and only 15% involved any sort of seller-paid closing cost assistance; down from a high of 27% last May. Half of all sellers who accepted contracts in the first week of August did so with 7 days or less on the market.

Contracts on luxury homes over $1M are up an incredible 93% over last year at this time. Between $500K-$1M, contracts are up 64%. Between $300K-$500K, they’re up 39%. Between $250K-$300K, up 15%. If you need to sell, this is the time to do it.

Conclusion:

*The HOI Index stands for “Home Opportunity Index” and is published quarterly by the National Association of Home Builders and Wells Fargo. It measures the percentage of homes deemed affordable in an area based on lending guidelines, interest rates, median income levels and median price. The most recent report was released on August 8th, 2020.

About the Author: Denise van den Bossche has been a licensed Agent and homeowner for over 35 years in the Metro Phoenix Valley. To CONTACT Denise, please call 602.980.0737 or EMAIL:  Denise@AZMultipleListingService.com. Her husband Patrick is President of Realty Executives International, so if you need help buying or selling homes anywhere in the U.S. or Canada, please call, email or text!

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Senior Real Estate Specialist

The National Association of REALTORS® (NAR) developed the Senior Real Estate Specialist® (SRES) designation for real estate members specializing in the 50+ demographic. Denise van den Bossche is Arizona’s premier SRES-AZ.com

Senior Real Estate Specialist
Selling the home of someone over 50 is very different than any other demographic.
SRES

NAR is the largest professional association in the World, founded in 1908. The SRES® is for REALTORS who want to be able to meet the special needs of maturing Americans when selling, buying, relocating, or refinancing residential or investment properties. By earning the SRES designation, REALTORS are prepared to approach mature clients with the best options and information for them to make life changing decisions. It also provides a Bilateral Cooperation Agreement with organizations outside the U.S. as an international REALTOR Member of NAR. The SRES is the only nationally recognized credential for 50+ age homeowner issues. NAR members, those allowed to use the REALTOR designation, are required to abide by its strict Code of Ethics. Not every real estate licensee is a REALTOR.

National Association of Realtors membership designation
National Association of Realtors is the World’s Largest Professional Organization
Tenure in serving the real estates needs of Seniors is Equally as important.

Selling the home of someone over 50 is very different than any other demographic. For starters, the equity in that home will help fund a long and fulfilling retirement for that person. The older the homeowner, the more essential that equity will be to fund later years. After a lifetime of achievement, you and your loved ones deserve to continue living the lifestyle built upon. For this reason, persons over 50 should hire a real estate advisor who has successfully helped their clients prosper and thrive through the many market cycles and downturns over the last thirty or more years.

Senior Advisors Advising Seniors, a consortium of professionals specializing in the 50+ demographic with a minimum of 25 years tenure in their profession.
Sometimes, we have a Loved One who could use a little TLC but don’t know where to start: Concierge Health and Life Care Management

At some point your loved one may have specialized needs, whether age-related or chronic illness. The emotional hurdles every family faces during this transition is daunting. After a lifetime of achievement, your loved one deserves to interact with people who can participate in a conversation that is enriching and engaging. Services needed may range from retrofitting a home to age-in-place, a companion to help with simple tasks, a driver, companion, another set of eyes on an existing treatment plan, or a nurse full or part time. Denise van den Bossche is a proud member of Senior Advisors Advising Seniors®, professionals including legal, financial, designers and caregivers with a minimum of 25 years tenure in their respective profession.

About the Author: Denise van den Bossche has been a licensed Agent and homeowner for over 35 years in the Metro-Phoenix Scottsdale Valley of the Sun. A Legacy LEED® AP, designated SRES, DMX, ePro, EcoBroker and member of Seniors Advisors Advising Seniors®, a consortium of experts to surround and support families facing aging or chronic illness. To request a no-obligation market report, home evaluation, or consumer guide on your specific needs, contact Denise at 602.980.0737 or email  Denise@AZMultipleListingService.com.  Denise’s husband Patrick is President of Realty Executives International, with 500 offices throughout North America.

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July 2020 Market Frenzy

Metro Phoenix Valley Experiencing a Market Frenzy in July – for the average priced home buyer anyway

Data and excerpts from The Cromford Report, Arizona’s most respected source, July 24, 2020

For Buyers

July 8 2020: 1.4 Million Homes and less than 8,600 Listings

Greater Phoenix has a population of approximately 4.8 million people and 1.4 million residences total. As of July 8th, only 8,579 were listed on the local MLS. Greater Phoenix has 30,000 to 35,000 listings in a “normal market.”

New listings in June compared to same time last year overall were down 7.8% (down 22% for homes under $300,000 – which has reached 38% to date in July) while contracts in escrow were 24% higher.

Finding your new home under $300,000 is nearly impossible

If those numbers doesn’t cause you to gasp, then this might: only 1,023 of the 7,700 active listings are single family homes under $300,000, and that number is diminishing every day. The last month has seen a surge of buyer activity, but it was not met with an equivalent surge of new listings. For buyers under $300K, new listings were down 22% in June compared to last year, and are down 38% so far in July. This is causing quite a bit of buyer competition for move-in ready homes in this price range.

New Home Construction

For buyers over $300K, the new home construction adds additional inventory and is providing some much needed alternatives. The top 3 cities for single family home permits are Phoenix, Mesa and Buckeye. Notable spikes in building permits issued can be found in Surprise, Maricopa and Queen Creek. Most new homes are selling between $300K-$500K, but buyers looking for a brand new single family home under $300K still have some options. Their best bet is in Pinal County or Buckeye with average sizes between 1,800-2,000 square feet for their budget.

Homes over $500,000 are strong, but nowhere near the frenzy

Conversely, new listings over $500K saw a spike last month, up 20% over last year. 1,596 new listing came on the market and 2,046 contracts were accepted in this price range in June.

For Sellers

Brace yourselves. Half of the sellers who accepted contracts under $400K in the first week of July were on the market for just 8 days or less with their agent prior to contract acceptance. Sellers who took contracts between $400K-$600K had a median of 14 days on the market with their agent. Sellers who landed contracts between $600K-$1M had a median of 41 days. It’s a good time to be a seller.

Sellers Getting Over List Price

While 28% of all sales in July so far have closed over asking price, that percentage peaks at 41% for those between $200K-$300K. Top cities for closings over asking price are Tolleson, Avondale, Glendale, Gilbert and Youngtown. Gilbert is the only city in that list with a median sale price over $300K. Seller-assisted closing costs remain popular and were involved in 23% of all sales in the first week of July. That percentage increases to 33% on transactions closed between $150K-$300K. Top areas where 50%-60% of sales involved seller accepted closing cost assistance were Youngtown, West Phoenix, Aguila, Glendale, and Tolleson. This supports the theory that sellers receiving offers over asking price in the West Valley and other affordable areas are still open to accepting closing cost assistance if a contract meets their most important needs.

See the charts and graphs supporting this month’s market report here.

Provided as a proud subscriber of the Cromford Report

About the Author: Denise van den Bossche has been a licensed Agent and homeowner for over 35 years in the Metro-Phoenix Scottsdale Valley of the Sun. A Legacy LEED® AP, designated SRES, DMX, ePro, EcoBroker and co-founder of Seniors Advisors Advising Seniors®, a consortium of experts to surround and support families facing aging or chronic illness. To request a no-obligation market report, home evaluation, or consumer guide on your specific needs, contact Denise at 602.980.0737 or email  Denise@AZMultipleListingService.com.  Denise’s husband Patrick is President of Realty Executives International, with 500 offices throughout North America.

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Homes for sale in the best Family Friendly neighborhood in Paradise Valley AZ

Homes for Sale in the BEST FAMILY FRIENDLY Paradise Valley AZ neighborhood

Best Family Friendly Neighborhood in Paradise Valley AZ - Denise van den Bossche, Realtor

Why Do People Live Here?

5,880 square foot 4 bedroom, 4 bath on over an acre sits at the 13 – 14th hole turn of the Ambiente Golf Course of the Camelback Country Club. (site)

Welcome to Paradise Valley Arizona’s best family friendly neighborhood. Camelback Country Club estates is located just 15 minutes from Phoenix Sky Harbor International Airport, in a Town frequently recognized for celebrities, luxury estates and gated compounds. But, here surrounding Paradise Valley’s two most recognized golf courses, lies a front porch community anchored by some of the nation’s top public schools, wide shady streets, sidewalks, and bustling with activity. You will find this to be the BEST FAMILY FRIENDLY neighborhood in the entire Scottsdale – Phoenix Valley.

Coming August 2020: 9390north57thStreet

Looking for a home in Paradise Valley’s friendliest neighborhood?   

Interested in finding homes in the best family friendly neighborhoods of Paradise Valley?  Homes for sale in the friendliest neighborhoods of Paradise Valley.  Click this link to find all the currently available homes in this area of Paradise Valley.

What are homes in the Neighborhood Like?

Homes in the neighborhood sit on 1 acre minimum lots, starting from around $2,000,000. People love Paradise Valley for its wide range of architectural styles on large lots, in contrast to a tract community. Most homes are not in a Homeowners Association (HOA). However, pride of ownership is demonstrated, as home values here are in the top 10% of the Metro Phoenix valley. Property taxes are kept low thanks to a handful of the most exclusive resorts in the State. Dirt Lots start around $1 Million, and you can sometimes pick up an original ranch style home for around $800,000 for demo, and there are new homes available.

What Else is Special about the Neighborhood?

Clever walkways and a bike path connect the community. Lots of open space between homes provide views of nearby Mummy & Camelback Mountains, indigenous vegetation and the lush green grass of the golf courses. Located in the foothills, outdoor enthusiasts enjoy walking , jogging and bicycling for miles on routes that can include both flat and impressive inclines. Ride or run to Camelback Inn or Paradise Valley Country Club without crossing a major street. The neighborhood is within 5 miles of some of the most popular grocery stores, coffee shops, restaurants, wine bars, fitness clubs, salons and boutique shopping. This neighborhood attracts a large demographic of younger families and empty-nesters relocating to Maricopa County.  Find out about everything that is nearby to this family friendly neighborhood of Paradise Valley including places of worship, banking, shopping, Attractions and recreation and much more on my website. 

Why Live In Paradise Valley AZ Township?

Paradise Valley tops the list for safest and wealthiest city in Arizona where estates can exceed $20 Million.  Paradise Valley  is most widely known for its celebrities, athletes and seasonal home owners seeking privacy and seclusion, within close proximity to the heart of Scottsdale and downtown Phoenix. More on buying in Paradise Valley Arizona .

What Schools will the Kids Attend?

Scottsdale’s world renown 3-C Schools are located here. How many elementary schools can boast of a local police presence? Welcome to Cherokee Elementary School where the PV Police Department maintains a substation. Don’t be surprised to find an officer playing “hoops” or eating lunch with students. Cherokee has historically enjoyed some of the longest wait lists in the state, with a new campus expected to be complete by March 2021. Located here in Camelback Country Estates in an amazing neighborhood, the school has a breathtaking Mountain backdrop. Nearby Chaparral High School has a well recognized athletic program, attracting students from around the nation. In addition, there are multiple top private schools located in close proximity to the neighborhood.

Now You Really Want to Find a Home Here, Right? 

If you are Interested in the current Homes for sale in the friendliest neighborhoods of Paradise Valley click on the link. Our ‘for sale’ property information is a direct feed from the Northwest MLS and is updated continuously throughout the day.  SEE AN AERIAL TOUR OF THE CAMELBACK COUNTRY CLUB GOLF COURSE HOME VIEWS HERE!!

SNEAK PREVIEW OF NEW GOLF COURSE HOME COMING AUGUST 2020 click on the link.

Questions?

About the Author: Denise van den Bossche has been a licensed Agent and homeowner for over 35 years in Paradise Valley Arizona. She and her husband Patrick have lived near the Camelback Country Club for over 2 decades. A Legacy LEED® AP, designated SRES, DMX, ePro, EcoBroker and co-founder of Seniors Advisors Advising Seniors®, a consortium of experts to surround and support families facing aging or chronic illness. To request a no-obligation market report, home evaluation, or consumer guide on your specific needs, contact Denise at 602.980.0737 or email  Denise@AZMultipleListingService.com.  Denise’s husband Patrick is President of Realty Executives International, with 500 offices throughout North America.

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Vacation Rentals in a Post-COVID-19 World

Vacation Rentals May Greatly Benefit from COVID

Tempe Town Lake Fireworks
Tempe Town Lake Fireworks

Vacation Rental owners in Scottsdale Arizona are cashing in this summer. July bookings of vacation rentals may be at an all time high. “Airbnb saw more nights booked for U.S. listings between May 17 and June 3 than the same period in 2019, and a similar boost in domestic travel globally,” according to Bloomberg June 7. This contrasts to just a few months prior when COVID-19 caused nervous Vacation Rental Owners to sell rental property due to cancellations and uncertainty.

Airbnb saw more nights booked for U.S. listings between May 17 and June 3 than the same period in 2019, and a similar boost in domestic travel globally,”

Bloomberg June 7, 2020

Reasons for the Popularity

Travelers are finding that it is much easier to social distance from others in a home with their own cooking and entertainment, than a hotel room. And working remotely from home, any home, has added to the enthusiasm, as families who have been cooped up for several months, look for a break.

Based on vacation trends discussed in Travel & Leisure in June, several key indicators favor private homes: Stays are Getting Longer, (reducing minimum night stay requirement risks); Private homes are desired over Condos and Hotels with Common Areas; Drivability to the Location instead of flying will be key; Pet friendly will be a huge draw; and Cleanliness is Critical.

The Effect of Low Interest Rates

Real estate continues to be a strong investment in most American’s portfolios (chart).

https://news.gallup.com/poll/309233/stock-investments-lose-luster-covid-sell-off.aspx
news.gallup.com April 24, 2020

Today’s investors are able to benefit from today’s low interest rate environment. With current low rates, investors are able to have the same payment on a $333,000 home that cost $226,000 five and a half years ago in greater Phoenix. And analysts seem to be unanimous that housing appreciation will continue.  More Market Stats here.

Vacation Rental Management Companies Paying Attention

At least some companies in the sector are making necessary changes while searching for COVID opportunities. Airbnb launched a heightened cleaning protocol for hosts, with guidance from the former U.S. Surgeon General Vivek Murthy, M.D., and leading experts in hospitality and medical hygiene. After re-thinking its plans for an IPO, don’t be surprised if the organization soon makes its market debut. And the stronger the industry, the louder its lobbying efforts. According to Fortune.com on June 30, “Airbnb is on track to have a better 2020 than 2019,” claimed CEO Brian Chesky on the Leadership Next podcast.

Booking flexibility is a huge factor in most survey results. According to an article in AARP in May, “Vrbo said it would ask hosts to refund a minimum of 50 percent of what customers paid, if they are not willing to rebook at another date.” Vrbo also rewards its host homeowners that demonstrate flexibility by posting a “cancellation badge” on that property’s profile.

Airbnb introduced some tools and programs called “More Flexible Reservations” to help hosts and guests navigate uncertainty as plans are canceled or postponed. If guests need to cancel bookings made during certain dates, both VRBO and Airbnb are refunding their nominal guest service fees redeemable on a future trip.

Scottsdale Arizona Ranks #1 for Vacation Rentals

In a Study by Realtor.com in April 2019, Scottsdale Arizona ranked #1 in its Study “Top 10 cities Where Vacation Rentals Rake in the Most Cash.” Criteria included the home affordability, and therefore the profitability of the business. Other criteria included rates, demand, per capita number of short-term rentals, average income as a ratio of monthly mortgage payment, and one-year home appreciation.

Why is Scottsdale such a popular location? Located in Greater Phoenix Metro, Scottsdale is a hotbed for American corporate elites looking for a weekend getaway full of mountain biking, golf, and hiking. And while cities across the country are creating tighter rules and outlawing Airbnb rentals altogether, Arizona has gone in the other direction—it signed a law in 2016 that prevents cities in the state from banning short-term rentals. That legal protection, combined with vacation rental demand, has made Scottsdale successful for investors for many years. (Note: laws can change. Also, there are stipulations, such as limitations to no more than six adult guests, etc.)

Golf Course with the Superstition Mountains backdrop in the Greater Phoenix Metro
Over 200 golf courses in the Scottsdale area

Another reason for the Scottsdale vacation rental boom: More than 200 golf courses and year-round sunny skies and 15 Major League Baseball teams stay in the greater Phoenix area each year during March Spring Training. These coaches, players, and their families often prefer renting an entire Scottsdale home than a hotel room for two months. And there are plenty of fans eager to rub shoulders with their favorite stars in a low-key setting. Other events include the Waste Management Phoenix PGA Open, the Arabian Horse Show and Equestrian Events and the most well recognized Collector Car Auction week.

Vacation rentals range from 7+ bedroom sprawling estates or Mountaintop Luxury Homes in Paradise Valley, to Horse Ranches in Rio Verde and North Scottsdale, to modest 2-3 bedroom homes with private pools. The budget-minded can score a relative bargain here when prices drop in the summer.

More on SCOTTSDALE

About the Author: Denise van den Bossche has been a licensed Agent and homeowner for over 35 years in the Metro-Phoenix-Scottsdale Valley of the Sun. A Legacy LEED® AP, designated SRES, DMX, ePro. To request a no-obligation market report, home evaluation, or consumer guide on your specific needs, contact Denise at 602.980.0737 or email  Denise@AZMultipleListingService.com.  Denise’s husband Patrick is President of Realty Executives International, with 500 offices throughout North America.

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