Closing Out a Decade
Is it just me or when you think of the year 2010 , it feels more like 3 years ago, not TEN whole years. A lot has happened in the world in that 10 year span. The decade started knee deep in a financial crisis. In January, the world watched in horror as Haiti was struck by an earthquake that resulted in over 300,000 deaths. High unemployment and depressed home prices were rampant in the US and Europe. Meanwhile the deadly “swine flu ” was making a record number of people sick.
But not all was downbeat to start the decade. The New Orleans Saints won the super bowl after the famous surprise on-side kick, making sports history. The 21st winter Olympics were held in Vancouver. Apple sold its very first iPad, and released the iPhone 4 (that one with pesky antenna problems, careful how you hold the phone or you’ll drop the call!) The affordable care act was enacted, which has completely changed the face of the medical industry. The Burj Khalifa, the world’s tallest building was opened in Dubai. And that was all just in 2010.
The “10’s” provided an entire range of highs and lows. But if there was one thing you could go back in time and do in 2010, it should be go buy a home (or 2!). In 2010 the national median home price was around $222k. In Arizona the Median home price in 2010 was almost half of that, at $120k. Today, the median Arizona home price is $281,000. Needless to say, some simple math tells us your 2010 purchase would have been a very wise financial investment.
Over the last ten years, we’ve gone from a real estate market where foreclosures and short sales were more than 50% of the homes on the market, to now just around 0.05%. A truly amazing turn around which has provided a favorable situation for just about anyone who bought property in this decade. The best part about the last ten years of real estate is the steady and predictable appreciation.
10 years ago the number of properties that were sold in Arizona is actually almost exactly the same as today. (About 90,000 homes per year). The major difference is Maricopa County is now home to around 500,000 more people than it was 10 years ago, which has created a huge demand in housing.
New Home builders, who had virtually stopped construction by 2010 are now building a large volume of homes to accommodate the increase in population and demand. Through October, there have been over 20,000 permits issued for single family homes in 2019 alone, for Maricopa and Pinal Counties.
The “10’s” also brought on the birth of the “iBuyer” – those companies who will pay you for your home. The reason these companies exist is by simply capturing the first time home seller crowd and capitalizing on their new found home equity. Of course you’ll always make more money selling the traditional route with a knowledgeable agent, but home sellers didn’t have this as an option 10 years ago (at least as an easily accessible option).
Although home prices have risen substantially over the past 10 years, that doesn’t mean it’s a bad time to buy either. At the current moment, the base interest rate is about a full percentage point lower than in 2010 average. Factor that in and that’s over $55,000 of saved money over the life of a 30 year loan on a median priced home in Arizona. To get that type of savings on purchase price, that’s equivalent to going back in time and buying a home when it was $55,000, or 20%, below current values. It’s no wonder the market for refinances AND purchases are doing so well right now.
As the sun sets on a decade that will be celebrated for the resiliency of the US to bounce back from financial turmoil, it’s all eyes on the future. The housing market is on stable ground and should continue playing a pivotal role in carrying on the American dream.
Wishing you good fortune, success and happiness into the roaring 20s!