If you’re wondering how our Arizona real estate market is doing, I have good news: After a bit of a lull, things are starting to pick up again.
Despite everything that’s happened since the COVID-19 lockdown, we’ve seen an increase in activity (much of which has been driven by historically low interest rates) and continue to see home values appreciate, much of which has been driven by historically low interest rates.
This situation reminds some people of the housing market crash of 2008 and 2009, but there are a few key statistics that illustrate the difference between now and then. First of all, 58.7% of all homes in America have at least 60% equity—the growth of home prices nationwide has helped the market stay stable. Secondly, 42% of all homes are owned free and clear, which means those homeowners don’t have to sell no matter what happens to the market.
“We’ve seen an increase in activity and continue to see home values appreciate.”
Also, the average equity in mortgaged homes is $177,000. Back in 2008, homeowners could take out almost 100% of their equity, which means if there was even the slightest market shift, they’d end up in the negative. Currently, we’re seeing people sitting on almost $200,000 worth of equity. Basically, tighter lending guidelines have helped homeowners because they can’t take out as much equity.
That being said, sitting on that kind of equity means that money’s not working for you. If you’re curious about unleashing some of your equity and using it to buy a second home, I can tell you that many people build wealth through real estate. It almost sounds illegal—you can get a loan in the neighborhood of 20% down to pay off your mortgage—but it’s real, and many investors do it. Knowledge is power, and the opportunity to understand your investment options is critical in building long-term wealth and earning financial freedom and stability.
If you’d like to learn more about investing in real estate or have any questions about our market, don’t hesitate to reach out to me. I’d love to hear from you.
