Have you driven by the Home Depot on Broadway or El Con Mall since COVID-19 made its way to the US? How about Lowe’s on Speedway in East Tucson. The scene most days are jam-packed parking lots and droves of people using quarantine time to reinvest in their homes with buckets of sweat equity and TLC. Although this is the recent trend a shortage of homes for sale coupled with historically low interest rates has fueled the housing market in Tucson and the US since 2015.
When COVID-19 blindsided the US economy many media outlets suddenly started comparing today’s housing market to 2008. I’m not sure why because they have nothing in common. In 08’ few people had equity in their homes and today nearly 60% of Tucsonan’s have over $85,000 of equity in their homes. It’s taken several years to build up but the well more than half of the homeowners have something worth protecting while in 08’ many bought with zero cash down and therefore had no skin in the game. This is the leading differentiator between the Tucson housing market today and the one 12 years ago. The second one being over 40% of homes in the US are mortgage free meaning they are owned free and clear.
This goes to show there’s good news surrounding Tucson housing and for most major metro’s across the US.
You may have read not to long ago unemployment claims shot up faster than ever before which caused fear to spread rapidly. More than 4 Millions filers already found a new job, especially as industries such as health care, food and grocery stores, retail, delivery, and more increase their employment opportunities.
Looking at what unemployment means for homeownership, and understanding the significant equity Americans hold today, are important parts of seeing the whole picture clearly when sorting through the mixed messages found online and onscreen. The elephant in the room is will the huge spike in unemployment cause a massive wave of foreclosures? It’s a timely question and even though there are huge numbers of unemployment claims, the equity American’s have in their humble abode will prevent the vast majority from just walking away.
Conversely, many homeowners in 2008 watched as their home value dropped as they continued making payments on a home that was worth less than what they owed. That’s obviously not the case in 2020.
Bottom Line
These times of uncertainty are very real and it’s not going to be easy. Rest assured Tucson real estate was on solid footing before COVID and it’s weathering the storm and doing well all things considered. Now more than ever I encourage you to look below the surface when a news story resonates with you. Oftentimes many online posts are based on more opinion than fact.
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