Will Phoenix Metro Real Estate Prices Take Another Dive??? (Mesa: sales, foreclosures)

[Captain Bill]

The total home sales for June 2011 was 11,141, a new all time record for ARMLS sales. In addition there around 1,500 trustee sales.

It beat the previous high set in 2005 of around 10,250 sales.

On July 1, there were 28,837 Active Residential Listings; down 8% from the beginning of June.

The numbers above are from the Cromford Report

As has been happening for the past couple years, the Supply continues to Decline, while the Sales continue to Increase.

The prices have remained relatively flat for 7 months now since Dec 2010.

Investor buying is expected to continue through the summer months, while the regular buyers are likely to slow.

While landlord type investors, and rehab investors continue to buy homes, the general public is still at a low confidence level. They have not seen the statistics, so they don't know what's happening in the market.

They keep hearing about the shadow inventory, and keep reading articles where people compare a June 2011 price to a June 2010 price which is comparing apples and oranges because the June 2010 prices had increased due to the first time home buyer tax credit.

The total number of REO properties in the Metro area are currently 17,292 (as of June 30). These include the REO's that are already Listed, and are either Active or Pending; the ones that are being prepared to put on the market; plus the ones that appear to be held back from the market.

So, does anyone think the overall (Metro area median)real estate prices will take another dive? If yes, then what will cause it?

[khuntrevor]

The low median has a lot to do with the significant amount of cash action at the lower end. I don't think the tightening of credit will affect it more. If you start naming other international cities--none will have lower prices than Phoenix; many will have prices many times higher, and this includes places where our own residents would refer to as "Third World...". Cali, Bogota, Quito, Buenos Aires, Johannesburg, Cape Town, Khula Lamphur, Jakarta, Manilla............Name one that has lower prices..........Name one that can produce the rental returns......The worst thing possible already happened. The second worst thing already did, too. It is looking more and more unlikely that he will serve a second term, as even the NEA is waffling on his endorsement. Our seriously bad job situation will only effect the mix of foreign investors.

[unit731]

I don't have any answers. But this is an interesting question.

In my devopment - began construction in 2004 and ended construction in 2007. I have seen some homes in foreclosure twice. Most of the used homes now are languishing around the $40,000 to $70,000.

[Captain Bill]

Since Supply and Demand are the primary driving factors for price movements, and since there is so much talk about the infamous "Shadow Inventory", which affects supply, I thought it may help to show the Valley Shadow Inventory. This chart is for single family residences in Maricopa County.

The chart below (click to enlarge) is courtesy of the Cromford Report. There is no better statistical information and informative reports on the Phoenix Metro area than the CR. All of the stats and reports are invaluable for investors because by utilizing all the tools available on CR, one is able to get a better handle on what to expect from the market.

The Pending Foreclosures include those with a Notice of Trustee Sale. It does not include those that are late on payments because many of those will never get a NOTS.

Unlisted REO's are those that are being prepared for market, or are being held back.

Active REO's are those that are Active on the MLS.

Pending REO Sales have a contract and are in escrow

Listed but Off Market are those that are Temporary Off Market for one reason or another, but they are on the MLS.

Note that the total count on July 2 was around 38,000, and in the past 8 months the count has declined from 53,000 at an average rate of around 1,900/month.

In addition, as of July 2, the Months Supply of Inventory for the Metro area has declined to a 2.9 months supply.

[ErikCortez]

Its gotta be the investors buying up stuff. So many people here I know cant find jobs.

[Corso]

Captivating thread. I am curious to know what houses (price bracket) are selling the best right now? Where do the $275-$350K homes fall into the equation? And what percentage of sold home are going to buyers who actually plan on living in them, and not renting, flipping, etc?

[Boompa]

Originally Posted by ErikCortez

Its gotta be the investors buying up stuff. So many people here I know cant find jobs.

The frightening part is that they are all running around with those funky 1% and 3% Loans that Fannie Mae, freddie Mac, and HUD are pushing.
That amounts to kicking the can down the road seven years and guaranteeing we will still have the same situation then. In many cases those Final offers are 20% higher than the asking price wiping out any savings they thought they had

[phoenix_new]

I have a strong feeling that we might have bottomed out atleast in some particular areas specially Gilbert, Chandler and Mesa.

[HX_Guy]

Originally Posted by ErikCortez

Its gotta be the investors buying up stuff. So many people here I know cant find jobs.

To counter that, I literally don't know one person that is unemployed. I had three close friends or family members who lost their jobs, one couldn't find anything for 6+ months. All are employed now.

[mjd2k]

I still think it is the banks holding and slowing processes thereby creating market demand. On one hand that is good as it keeps prices up, on the other hand, its is not so good as it will drag out the process for many years.

The cdn$ is quite high right now so there may be more investors and winter home buyers from Canada. However, people I know have already done their AZ buying.

Just mho and I could change my mind tmrw. I admit I don't have a clue. Every "expert" has had an opinion on AZ real estate and everyone's opinion has been wrong at least half the time but they sure crow about the times they were right!

Well presented CB.