Real Estate Market Update
Here you'll find my newsletter detailing home price and home sales trends in the Metropolitan Phoenix and Tempe Real Estate Markets, along with my predictions of things to come in the local Real Estate market.
December 2013
Arizona Real Estate Market Update
for the Holidays
Elliott Pollack, president of Elliot D. Pollack & Co., an Arizona economic and real estate consultant since 1987, recently reported the following points:
- The recovery continues at a slow and steady pace. All economic indicators are on the rise for Arizona.
- Arizona is back in the Top Ten for population growth. (Of interest to International Property Specialists, 40% of that growth comes from outside the US.)
- Ditto for job growth, and this metric is projected to continue at the current pace until 2016.
- Real estate values will continue to show growth but level off as we approach the 30-year averages of 3% towards the end of 2015.
- All the other indicators that affect construction and growth are also positive.
- In the commercial sector, vacancy rates are dropping and will continue to drop for the next few years.
So, in short, the Arizona real estate outlook is rosy for the foreseeable future, and my investors and I are cautiously optimistic.
For more information and detailed graphs and charts you may wish to go to www.arizonaeconomy.com and subscribe to Elliott Pollack’s newsletter Monday Morning Quarterback.
If you have any questions or would like to talk about how this affects your personal situation please call me at 602-369-3224 or email me at [email protected].
In the meantime, I'd like to wish you and your family a happy and healthy holiday season, and I look forward to talking to you soon.
Best,
Patrick
June 2010
To serve a new wave of computer savvy real estate investors, an Arizona company, called Smart Arizona Foreclosures, has set up a website reminiscent of eBay, which offers online bidding for qualified cash buyers. Now you can bid on bank owned residential properties without even leaving your home! Sound too good to be true? We don’t think so.
My associates at Smart Arizona Foreclosures have designed a streamlined website with a number of fail-safe devices (title search, photographs, minimum/maximum bids, etc.) to minimize the risk. In addition, my clients will have my assistance in double-checking property values, resale estimates, rehab charges, and other details.
Here’s how it works:
• We have a preliminary conversation to establish your maximum purchase price, city/neighborhood preferences, ‘hold-and-rent’ or ‘fix-and-flip’ intentions, etc.
• You send $10,000 to be held in escrow for each purchase. (You also need to be able to wire the balance within 24 hours of a successful bid.)
• You sign up at the website for a buyer name and log in. You are now ready to select from a short list of properties coming up for auction in the next couple of days. (I will work with you to establish your parameters and set up your search.) We will request a title search and photos of the selected properties at this stage.
• When you find a property that fits your specifications, you enter your starting bid and your maximum bid, click ‘submit’ and wait to see if you are successful. Monday’s bids will be auctioned on Tuesday, Tuesday’s bids on Wednesday, etc.
Of course, this opportunity is not for everybody but this is a way for ordinary investors to get access to the ‘county steps’ auctions of bank owned properties which are normally not accessible to the general public. Bidding at these auctions has historically been a closed shop, with participation limited to a few experts who take all the spoils.
May 2010
Real Estate prices are up for single family homes in the Phoenix Valley but you could have missed it if you hadn’t read the end of two articles buried on page D-2 of the Wednesday and Thursday editions of the Arizona Republic.
As I have been saying for some time now, prices bottomed out in March of 2009.
On Wednesday we learned that Phoenix is one of 91 major cities out of 152 nationwide to post an increase in home prices during the past year.
This National Association of Realtors survey showed that prices of existing homes climbed 9.1% in the Phoenix area for the year ended March 31, 2010. You might have expected that kind of good news would have been a headline -- but no.
On Thursday, the following day, there was even better news ... yet again buried on page D-2 of the Republic’s Business section: The median resale price for a single family home in April was $144,000, up 15.2% from $125,000 a year ago.
So there you have it. In historic terms, that is a huge increase. Several of my clients who have recently purchased homes at great prices realize that, if they had started nine months earlier, they might have realized even more of an increase. I had to confirm their speculation.
So what does all this news mean? It means the real estate market has officially bottomed out and that home prices are rising. Good news for homeowners hoping to sell in the not-too-distant future. And some homeowners may no longer be upside down.
To investors, I would say “the train is leaving the station.” A conversation yesterday with one of the top REO (bank-owned property) realtors in our office confirmed that the number of foreclosed properties coming his way has slowed down to a trickle. At a recent national conference several of the large banks indicated they are severing their relationship with thousands of realtors. Apparently the banks are actively pursuing every possible alternative before going the foreclosure route. So MLS investment properties will be diminishing and those that do appear will create a bidding frenzy and prices at the wholesale end should start climbing again.
My next blog will cover a new option for bidding on line for bank properties and getting them before they hit the MLS listings. Stay tuned.
November 2009
Last week I attended the Arizona 2010 Real Estate and Business Forecast. Elliot Pollack, Valley economist who has been providing Economic Forecasts for more than 25 years, presented valuable information for homeowners, buyers, sellers, and renters. There was also a panel of real estate experts from both residential and commercial specialties who essentially confirmed what Elliot Pollack reported.
The main message from the seminar was this:
- Economic recovery will be slow… there is no silver bullet.
- Home values may not be on track until 2013.
- The barometers of real estate recovery will be:
1) population growth which will be driven by
2) job growth or vice versa.
- Energy technology (wind, solar, etc.) will be more important than ever for Arizona’s economy. The semiconductor industry has gone overseas and don’t expect it to be back soon. Aerospace will concentrate in areas of research centers (not Arizona).
- Economic recovery could take four years and thus the 2013 time frame for the real estate market’s return to the highs of 2007.
For Renters:
Residential or commercial renters- now is the time to renegotiate your lease. There is a huge oversupply of rentals and landlords should be ready to take any deal they can get or they may have to see their properties empty and subject to vandalism.
For Buyers:
- First time buying a home? Now is the time.
- Buying a home is still cheaper than renting a home, but not for long.
- Interest rates have not been this low in years.
- The First-time Homebuyer Tax Credit will be available until this spring.
- Real Estate Deals are out there but the inventory of smoking deals is beginning to dry up.
- Talk to a mortgage lender and get qualified immediately.
- Affordability indices for the valley are at record lows.
“Buyers -- you can buy more house now you could at any time in the past 11 years.” Elliot Pollack, Economist.
If you are considering purchasing a new home from a home builder, please remember it costs you nothing to have a buyer’s real estate agent represent you. If you decide to not have a real estate agent represent you, then you have no-one looking out for your best interests. If you want a better deal for you and your family, call a realtor before you go out to look at those new homes. As a trusted Tempe Realtor, I can help you get a great real estate deal.
For Homeowners:
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If you are happy in your home and not thinking of moving and can afford your mortgage, then count your blessings and enjoy your good fortune.
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If you are looking to cash in the equity in your home, then the longer you can wait the better.
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If you are thinking of moving up and you still have some equity in your home, then it is time to sell. (As your home value increases so will the cost of your new home.) And if you have been in your home for five of the last eight years, then there may be a tax credit available to you.
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If you are downsizing, then hang in there until you are good and ready to move.
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If you are upside-down and want or need to move, then a short sale may be a solution. It is a difficult and complicated path but we have some top short sale realtors at our office. If a short sale is an option you are considering, I would be happy to set you up with an appointment with one of our Keller Williams short sale real estate experts.
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If you are upside-down and want to reduce your monthly payments, you may want to start a conversation with your lender about loan modification.
Please call me to discuss any or all of the above real estate scenarios. I am happy to help.
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September 2008
Inventory (supply) is down slightly: 52,600 this month, down from 53,400 last month. That means that sales are exceeding the number of new homes coming on the market. Considering all the foreclosures that are being dumped by the banks (representing a high percentage of sales) that is really a good sign.Sales (demand) are almost the same: 5900 this month versus 6000 last month.Pendings (sales that will close in the next 30 days) are also the same: 6750 from 6800. If we allow for seasonal adjustments then we saw yet another rise in the number of sales and a small drop in the inventory.
August 2008
The Real Estate Market Continues to Recover
By The Numbers:
Inventory (supply) down: For the fifth straight month, total inventory has dropped. We are still in the 50,000s and although this is still high, the trend is down.
Sales (demand) up: Closed sales for June are above 6,000 and are double what they were per month during the slump in 2007.
Forecast: Pending sales for August are still around 7,000, so it is safe to conclude that the downward trend will continue.
The absorption rate (time to clear out the current inventory) has dropped to 9 months from over 20 months in 2007.
The last time we saw a similar rate was in the Spring of 2007. We are approaching normalcy.
Conclusion: The Market Continues to Gain Momentum.
On October 1, FHA down payment requirements will increase from 3% to 3.5% and the grant money that helps first-time home buyers with their down payment goes away. Please keep in mind that some mortgage companies are already eliminating down payment assistance: One of our preferred mortgage brokers has indicated that borrowers need to seek down payment assistance by no later than the end of August.
We can expect to see a rush of new buyers jumping into the market at the lower end prior to the October 1 deadline.… Stay tuned as we will be watching the numbers for August and September very closely.
Foreclosures:
Foreclosures spiked dramatically in June indicating that there will be a flood of bank-owned properties coming on the market. But, even more dramatic is the number of pre-foreclosures:
According to Realty Trac, the number of pre-foreclosures is 12 in the entire Valley (down from 48 in June and several thousand in May). If this trend continues there is no question that the foreclosure market is about to slow down dramatically.
As soon as the last batch of foreclosures is snapped up by investors and bargain hunters, the window will truly be closing and all those fence-sitters will jump in (possibly too late to take advantage of the real bargains) and start driving prices up again.
Prices and Market Recovery:
If home prices had risen at a normal, steady rate since 2000, the average home will be valued at about that price in September. The market has corrected back to normal levels.
35% of sales in July were foreclosures and averaged a mere $150,000 apiece. While foreclosures may have brought the “average price” down, by the time these averages go up, the market will have already turned three or four months earlier. The supply and demand numbers are driving the activity.
Pre-foreclosures have been drying up for the past two months. The FHA down payment increase and buyer assistance programs will be disappearing by October 1.
These three major factors could be the catalyst to ignite a dramatic and rapid market recovery: Not a matter of “if” but rather a matter of “when.”
July 2008: The Real Estate Market Continues To Recover
June 2008: The Window of Opportunity is Starting To Close- Don't Miss Out
May 2008: The Market Has Turned- Time to Get Off the Fence
July 2007: The Great Tempe Market Explosion
June 2007: Tempe Unscathed by Foreclosure Fallout?
May 2007: Deciphering the Foreclosure Hype
April 2007: Home Buyers of the World: Unite!
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