Metro Phoenix’s housing market experienced a jump in the housing market The area’s median home-sales price climbed almost $10,000 in March from February.
The median price for March was $204,500, up almost 4.9 percent compared with $195,000 in February, according to a new report from the W. P. Carey School of Business at Arizona State University.
March’s higher home prices came as part of the traditionally busy spring sales season for metro Phoenix. Increases likely will continue through May says the report.
February’s median price had been the lowest median sales price reported for the region in seven months and despite the bump in home prices in March, the number of sales is still far behind last year’s pace. Home sales were down 20 percent in March compared with the same month a year ago.
Demand for Valley homes will continue to rebound more strongly next year, but a recent drop in mortgage rates and lenders making mortgages available to more buyers could help the housing market over the next few months.
The average rate for a 30-year mortgage fell to 4.18 percent this week, according to real estate research firm Zillow. And in mid-April, the Mortgage Bankers Association’s survey indicated it was the easiest time for borrowers to get mortgages in the past three years.
Median metro Phoenix home-sale price likely will fall again during summer, when luxury, snowbird and active-adult home buyers retreat from the area’s heat.
We may still be looking at little to no annual price appreciation by the end of the year though so we will have a level market as we finish out the year.
On the horizon we see a big wave of buyers who lost homes to foreclosures and short sales during the recession should be back in the housing market starting next year, boosting demand and prices in metro Phoenix.
So stabilization is the key word for the first half of 2014 and will continue till 2015.
Stay tuned for more…
The good news for metro Phoenix is that home values are still on a steep upswing — by more than 35 percent in November, to be exact — and foreclosures and short sales continue drying up. Ironically, that leads us to the bad news, which is that the Valley may be headed toward — and I quote the words of a local expert — a “chronic supply problem.”
Michael Orr, a real estate expert at Arizona State University’s W.P. Carey School of Business, released his latest housing report on Thursday stating that last year’s surge in Valley median home prices continued through November, which also climbed by about 3.5 percent from the previous month to $162,500.
The boost, Orr said, has been gradually pushing out cash investors, who made up 27.5 percent of all Valley home sales in November. That’s still a high figure, but was nonetheless down from the August peak of about 35 percent.
Much to the relief of traditional homebuyers, who typically need financing, fewer investors could mean a less competitive market in 2013, he said. But their woes may not end there.
The price surge has been driven by an abnormally low supply of homes for sale in the Phoenix market — and Orr believes the problem may persist, or even worsen, this spring.
“We don’t see a strong flow of new listings coming onto the market,” Orr said in the report. “For example, short-sale listings are down about 70 percent compared to this same time last year. As the market improves, it seems many people may have decided to hang onto their homes in an effort to let values keep going up. I also anticipate another possible drop in supply this spring.”
In recent months, competition for the few homes for sale has grown increasingly fierce, and more often than not favors those with cash-on-hand. Ordinary buyers have thus turned to the new-home market out of frustration. While the investor trend seems to be waning, the supply problem persists, and “Unless new-home builders can start keeping up with rising demand, we may have a chronic supply problem,” Orr said.
On Dec. 1, almost 13,500 single-family homes were for sale on the Arizona Regional Multiple Listing Service, according to Orr’s report. That’s down 7 percent year-over-year, but was still 8 percent better than November and up by almost one-third from September. But supply may dip again early this year as the number of distressed properties that once flooded the market continues to dwindle.
In November, there were 34 percent less completed foreclosures year-over-year, nearly 48 percent fewer homeowners that started the foreclosure process and a whopping 43 percent drop in overall supply of distressed properties, the report said.
That means bargain deals are now increasingly harder to come by, with homes priced below $150,000 making up only 6 percent of all supply — or about 810 homes — on Dec. 1.
“As prices go up each month, price-sensitive buyers, such as investors, get a little less enthusiastic,” Orr said. “Bargain hunters haven’t got much left to pick over, which is allowing more normal buyers to jump into the market before prices rise past what they can afford.”
The next few months may be a good window to purchasing a home as investors drop off and before prices surge up.
So lots of you might be happy with a proposed freeze on foreclosures. This is not good news for us here in Arizona.
Data from RealtyTrac Inc. showed that the sale of properties in foreclosure has been brisk in states like Nevada, Arizona and California. Some of the cities which saw the greatest expansion during the real estate boom such as Las Vegas, Phoenix and Los Angeles have also been the same areas which have witnessed a greater percentage of sales coming from foreclosures That is, until the recent wave of foreclosure freezes began occurring all across the country.
In these areas, having foreclosures frozen is very possibly the worst thing that could have happened to markets which were already struggling as a result of the housing crisis. Data from the report showed that sales of foreclosures made up 56 percent of Nevada-based transactions, 47 percent of transactions in Arizona and 43 percent of those occurring in Southern California. This means that freezing foreclosures also means freezing new home sales.
Major lenders including J.P. Morgan Chase, Bank of America, GMAC and PNC Financial services have all halted foreclosure proceedings. What began as a series of apparently isolated incidences has now spread to all 50 states. Experts now believe that it is unclear exactly what the extent of the problem might be and how long it might take to resolve.
This slows down the clearing out process that is necessary to bring the Real Estate market back to health and prolong the protracted period of recovery. Not good news…
The shots go back and forth across the room. How many teachers were given notice yesterday? Nine?! And the class sizes might be what? 30—35 kids per class room? Shouldn’t we be hiring more teachers and paying them better, not letting them go?
Now let’s decide how are we going to pay for sports programs this year? You’re what, eliminating the girl’s volleyball team and dance team?! More coaches let go? A man in back stands up to say if there is less money, we should cut out sports and focus on academics all together. The crowd bristles at the remark, including me. My wife stands up and fires back. (Go Lisa!)
What’s the reason for all of this? There is a HUGE shortfall in the school budget. But don’t worry; there is a plan. Well, plan “A” is what we have now to cope with the shortfall. All those cuts! That’s the plan? And if the law ISN’T passed then MORE cuts will have to be enacted.
That’s plan ”B”…. That’s plan “B”?? I watch movies. Plan “B” is supposed to be better if not at least as good!! John Wayne’s plan “B” doesn’t include a suicide run into a band of Indians when he is trying to rescue the girl!!
How did we get to this point, where we as parents and teachers are sitting in a community room discussing how many teachers we are going to get rid of and if sport programs are necessary for our kids? How??
IT’S CALLED REALITY. The recession has hit us and hit us hard and principals and teachers are being given the almost impossible task of trying to run their schools and classrooms with less money than is necessary to do the job and they are trying to do it in a way that up holds the standard we all expect.
As a Realtor, the first thing people who move here with families ask is “How’s the schools?” It’s so important, one of the few things I put on my opening page on my website is a service to help Buyers rate schools. If our schools are not up to speed, it affects our ability to attract people to live here!
When I first walked into that budget meeting in the Fountain Hills School District I was against Prop 100 and my wife teaches there! Every fiber of my being goes against any measure to raise taxes. For ANY Reason, I am of the belief that one cent here and another cent there adds up to dollars and slowly we get squeezed into paying higher and higher taxes which I am against.
After the meeting another realization hit me. That, however, distasteful it is in times of emergency, emergency measures are needed. And when I’m sitting in a school budget meeting and I hear talk of classrooms with up to 40 students per teacher and whether after school programs and sport programs that teach kids how to be disciplined and work together outside of the classroom were valuable or not and should stay in the curriculum, then I say it’s a real emergency however got here.
I‘ll put it like this. Maybe you don’t like the police for whatever reason. You had a bad run in with one at some time. But if it’s 2 am and there are two guys in black masks picking at your door to get in, would you call one? Would you be happy to see one? My same feeling with taxes. Don’t want them, but if it helps the situation under a controlled measure I’d like to have the benefit of them.
My point is Arizonans realized the same thing and voted for prop 100 and in the next three years a one cent tax will be initiated to help us through our budget crunch with the money going directly to the schools and emergency services.
Besides helping the situation on the ground it has the important effect of sending a clear message that we care about our schools and services and that Arizona is a place that protects these things even if it goes against our grain and we are willing to make the tough choices. This will help greatly with our recovery in the Real Estate market by keeping Arizona an attractive place for families relocating here by demonstrating our commitment to our schools and services.
I love being an Arizonan. By nature we are fiercely independent and we Arizonans do what is right, criticism & politics be damned and act to do what is necessary. This wasn’t a campaign of fear as it was much a campaign of necessity.
And although I do believe strongly we need to keep pressure on our politicians to continue to cut more unnecessary spending on items in the budget (and they are still there!) the message on the ground from where it matters most, our schools and our families, there has been a clear demonstration of need and we had to respond. And respond we did…the right way, with the passing of prop 100…..What do you think?
Sal Cartagine is an award winning Real Estatet Broker with 23 years experience specializing in residential, relocation, rentals, investments and property management. Sal can be reached directly at (602) 818-3886
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