We made it! Yes, we made it through 2011 as another year of a down economy, low home prices, and generally a “when will it end!” mentality in the Arizona housing market. Here is the news you have been waiting for.
IT HAS ENDED!
The storm has passed and we are now in the clean up year to break loose and move forward. The clean up year is 2012!
Bob Major returned to Phoenix in October in search of more bargains like the four empty houses he bought in 2010 at rock-bottom prices. The retired builder from Vancouver instead found real estate about 20 percent higher and stiff competition.
“There’s been an extreme turn,” Major, 66, said in an interview at a Chandler, Arizona, pizzeria, sitting beside his wife, Wendy. “We put bids on 30 properties and only got two.” |
| The above clip came from an email received 01/20/12 from Sharon Tindell of Stewart Title. |
Here is why I am so optimistic and see the break in the storm, and sure, not everyone will agree with me. But I always said, Arizona was the first state into the crash, and will be the first state out of the crash. The Arizona housing market, if you have been fortunate enough to have received my previous monthly newsletters, had radically changed course back in January 2011. Those who have followed my Supply and Demand graphs in the previous newsletters have had the opportunity to see a steep month to month decline in home new listings in the Arizona Valley housing market causing an increasing diminishing Supply. Sales continued to maintain a steady level as previous years. The inevitable clash of shrinking inventory and continued steady demand finally met each other in the late 4Q of 2011. Currently there is heavy competition from Buyers, of which many are Investors, who are battling each other for any perceived good valued home.
Here are the factors driving the market:
- A very steady DROP in Foreclosures and Lender owned homes (REO) occurred in 2011.
- Record LOW Mortgage Interest rates continue to hold strong through much of 2011 into 2012.
- Very HIGH demand for Rental homes due to an unprecedented displacement of homeowners through Foreclosures and Short Sales, over the last 3 years.
- VALUES on Arizona Homes have pretty much bottomed out and are now actually inching up slightly due to competitive Buyer interest.
- Rental returns are very ATTRACTIVE to Investors and show continued strength.
Here are the opportunities:
- HOMEOWNERS, if you are highly upside down, need to move, or just can’t continue paying a huge mortgage payment, NOW IS THE TIME TO SELL! Especially with the IRS Mortgage / Debt relieve act of 2007 due to expire on December 2012. Without this protection, a Short Sale may not make sense. Of course the huge interest currently from Buyers is VERY beneficial to making a Short Sale happen or any sell to happen!
- BUYERS, be prepare to move quickly and aggressively when you find a home that fits your criteria. Great deals can be still be found, but you have to be prepared to go OVER list price (if it still fits your financial goal and makes sense) as many Realtors just have not caught up to the recent Market Dynamics and thus sometimes will price too low. I recently represented an Investor in which we found that we were competing with 6 to 8 other offers on homes listed less then 5 days! Yes we finally did snag a great deal, which is currently in escrow. We offered 7.3% ABOVE the listed price! Later the appraisal came back at 8.3% ABOVE the listed price!
Summary:
Again, the Arizona residential market was one of the first ones IN the crash, and we will be one of the first one’s OUT of the crash. This new emerging market dynamics will open up opportunities and allow us to finally begin significant change for the better in the Arizona residential housing market as we will increasingly see this in 2012
The following graph has been updated from last month and does show graphically how big the supply vs sales numbers have changed. As i suggested in November 2011, is was appearing to be a Seller’s Market, it now IS a Seller’s Market.
MLS Listings Available vs Sales
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