The soaring home prices across the country have put homeowners in the driver's seat. In just the last year, they’ve gained $1.5 trillion in equity and some of the deals we’re seeing locally are eye-popping.
“Those are extraordinary numbers,” said Barbi King with Keller Williams.
King told ABC15 about a recently sold Gilbert home that was purchased in February 2020 for $600,000.
The home was renovated for $200,000 and later sold for a whopping $1.4 million this April.
Then there’s another nearby home, sold on March 5 of this year for $500,000 then sold again.
“Sold at $500,000 at the beginning of the month then closed less than three weeks later for $590,000,” said King.
It’s stories like this that can make anyone nervous. But when it comes to the data, the current market is very different than the Great Recession.
Data also shows a historic decrease in supply across the Phoenix metro area.
Lending practices are much tighter for one. Of the mortgage loans issued this year, only .01% carried adjustable rates versus 60% during the bubble.
Borrowers are putting more down and have higher credit scores. Those who may have missed mortgage payments due to job loss in the pandemic now have a more valuable home and plenty of buyers which will keep foreclosures to a minimum.
“With the amount of equity that people have in their properties, they wouldn’t be foreclosed on, they would put a for sale sign up in the front yard and that house would be gone in a heartbeat with competing bids over list price,” said King.
The homes aren’t just flying off the shelves in the metro area either as working from home has changed the way so many approach where they live.
“People have been looking at outlying areas, Prescott has exploded, we were up in the Pine Top Lakeside area near Torreon and Show Low’s second home market is on fire right now and I expect to see that in Payson as well,” said King.
According to the numbers, those communities have all seen price increases of 20% in the last 12 months.
The average home in Prescott for example priced out at $350,000 in 2018 and is now over averaging at half a million dollars.