Looking to the newspapers or internet for your real estate information? Tread carefully. What news pundits call “new” when it comes to real estate information is anywhere from 30-120 days old! Factor in that these articles are reflecting the averages for the entire city or the entire county, not your zip code or your neighborhood. A report of an average of $120,000 for a Phoenix home is misleading. It averages together the areas hardest hit by foreclosures and short sales with areas of Scottsdale and Paradise Valley. It is too broad a picture to carry real meaning for the individual home owner. We look to The Cromford Report for an excellent city picture as that is the focus of those who contribute to its reports. We can narrow to a zip code and then, through the MLS, narrow to a subdivision or within a mile of the home. No broad strokes here!
There is no question among the leading real estate professionals that the distressed market is defining our market today. Home prices are being impacted by the foreclosures and short sales in neighborhoods, some areas more than others. However, there are signs that the residential market in Phoenix is coming to life!
A leading indicator is the drop in delinquencies. In some areas this drop has become a stabilizing force, especially true in the homes priced above $400,000. According to The Cromford Report, when we study the ups and downs since 2004, it is clear that the bottom fell out of the market in 2008 and that the bottom for prices probably hit in 2009. However, this is not true for all areas of town. Any area that still has more foreclosures than normal sales will continue to decline. Areas where foreclosures have nearly disappeared are stabilizing. That being said, be aware that prices are a lagging indicator of a market change; they are the last indicator to go down and will be the last one to come up!
The newest thinking is that we will see significant appreciation (over 4%) in 2014. Since most areas of the valley dropped in value 40-50%, it tells us how long it will take each area to come back. But it will come back! There is a reason that Warren Buffett is buying land all over the country; locally, Fulton Homes is buying; DMB is buying. Real estate is still considered one of the best investments we can make.
2011 is predicted to be the Year of the Buyer! Low interest rates, artificially low prices that are below what a home costs now to build, and a huge supply of inventory make this a perfect buyer’s market at every price point! As supply is depleted and price per square foot begins to rise and as interest rates rise, the market will shift. There are high numbers of pending sales right now and normal sales are increasing. The luxury market is seeing a slight shift from a buyer’s to a seller’s market and some areas are beginning to see a rise in multiple offers on properties.
Here’s an eye opener: with the drop in home prices and the low interest rates, buyers are saving more money now than they did during the Home Buyer’s Tax Credit surge!
What does this mean for you? If you would like to move up the home market ladder and find your dream home, now is the time. If you want to downsize, do it now. If you have been waiting to buy your first home, now is the time. What you might lose in the sale of your current residence will be offset by a bigger gain on the buy side. Loans are available now and the jumbo loan (over $417,000) is available again.
If 2008-2009 was a perfect storm for a crash in housing, 2011 is predicted to be the perfect storm for the buyer and some sellers. If you are considering a new home or have been waiting to buy or sell, call us. We can tell you the current value of your home, connect you to a lender who can make it happen for you, and find you a fabulous home in your price range!
