Real estate professionals say the pandemic is fueling a hot real estate market in Rim Country.
Like other Arizona communities, Payson is on trend with the pandemic-fueled real estate market, which has the president of the Central Arizona Board of Realtors (CABOR) and a top performing real estate agent surprised.
“I have been selling in Rim Country since 2003 and I have never witnessed a market like this,” said Wendy Larchick, associate broker and partner with Keller Williams Arizona Realty At the Rim Team.
She said there is a significant lack of inventory across all price points.
She is seeing a significant increase in buyer traffic for higher-cost homes, both at the golf communities, river communities and remote luxury homes in Pine.
Even Payson’s new town manager Troy Smith is finding it difficult to buy a home.
Smith is expected to arrive in town Oct. 19, but says finding a home has “proven to be a challenge.”
“The market is quite active.”
Jennifer Kiley, president of CABOR, has worked in Rim Country real estate for more than three decades. She’s noticing a similar trend locally, but also elsewhere.
She said in her current role as CABOR president, she speaks with real estate association presidents all over the state and they report every area, from Sierra Vista, Yuma, the White Mountains to Kingman, have experienced the same influx of buyers, rise in real estate prices and historically low inventory levels as Rim Country.
Kiley said the trend doesn’t stop at the Arizona border, either. The nation has seen such an uptick in home buying, moving companies can barely keep up with demand.
So, how can a pandemic cause a real estate boom?
Breaking down the
pandemic housing boomLarchick said COVID has created a unique situation because more people are working from home and children are attending school virtually. With the flexibility of working remotely, more people are choosing to leave urban areas, like the Valley, for lower density/rural areas, she said.
Rim Country has some benefits that make it especially attractive. From the climate, surrounding 3 million acres of forest and proximity to the Phoenix metro area, it’s “the ideal escape from city life,” Larchick said.
Kiley said research shows there are three reasons for the pandemic real estate boom, starting with the pandemic.
“According to the United Nations, 90% of reported coronavirus cases worldwide are concentrated in urban areas, which is reason enough to move,” she said.
Many homebuyers from urban areas assume it’s cheaper to buy in a rural area. They get a sticker shock when they come to Rim Country, said Kiley, but buy anyway.
She agrees with Larchick that the emergence of remote working has opened up a new lifestyle.
“This benefits both employer and employee in some cases and so people are realizing they can actually live the life they’ve always dreamed of while they are still working and not wait until they retire,” said Kiley.
Finally, historically low interest rates allow a homebuyer to purchase a lot more home for the money. Add to that, Kiley said, lenders have great rates and good loan programs.
An interesting trend Kiley noted is that more buyers plan to live full time in Rim Country, rather than buy a second home.
Will the boom affect affordable housing?
One buyer group that hasn’t seen a benefit from the real estate boom — working-class families.
Larchick laments the lack of affordable housing which “has always been an issue in Payson.”
Typically, retirees from other areas come and buy what a Payson working-class family could afford, she said.
Recently, the Payson council approved a park model/tiny home project near Highway 87 at Tyler Parkway, but Larchick said the homeowner does not own the land. Instead, they pay a monthly lease fee, making that project “more set up ... for a second homeowner.”
She sees condos as a solution to the affordable housing crunch in the area, but so far, the town has not had many applications for such projects. Developers continue to build three-bedroom, two-bath type homes that sell around the $300,000 range.
Comparing 2019 and 2020, the average home price jumped from $321,543 to $361,764, an increase of 12.5%, said Kiley.
But a snapshot of the market this month shows prices have gone even higher.
As of the week of Sept. 21, 67 homes were available for sale in the area and the average list price was $609,429, according to Kiley.
Of the 96 homes waiting to close escrow, the average list price was $429,453, which shows to Kiley only the higher end homes are left to purchase and the prices could very well rise higher by the end of the year.
But it’s not only houses that have flown off the shelves.
“Lot sales have nearly tripled during this time frame with 26 sold in 2019 (April-September) compared to 63 since April 1 of this year,” she said.
All of which concerns Larchick because she believes homeownership “is one of the best and easiest steps to creating wealth, for anyone.”
Kiley advised homebuyers to work with a real estate professional as there are often multiple offers on a property. A real estate agent can help a seller navigate the often nerve-wracking purchasing process.
“Your local Realtor can guide you in making a decision that is best for you,” she said.