Prescott Real Estate - Signs of Recovery (Phoenix, Prescott Valley: for sale, real estate market)

[BriansPerspective]

We are entering a very exciting time for the real estate market. Nancy and I have been tracking market statistics since the peak in early 2006. At the worst of times, there were over 3200 residential properties for sale. Today there are about 2500. So the inventory of homes for sale is way down.

Demand has also picked up. Some of the demand is seasonally related - more homes tend to sell in the summer than during spring, fall, and winter. However, there was a spike in home sales in June. There were 151 residential sales in May. Based on historical averages, we would have expected about 160 residential sales in June. There were 239, which is 80 more sales than expected. The trend continued in July and August, thus removing inventory.

In Prescott Valley subdivisions, there have been some dramatic changes in inventory and sales for site-built homes:

• PCC: 35 homes for sale vs. 70 at the worst of the market.
• Granville: 30 homes for sale vs. 70 at the worst of the market.
• Pronghorn: 17 homes for sale vs. 66 at the worst of the market.
• Viewpoint: 32 homes for sale vs. 115 at the worst of the market.

The most dramatic change is in Quailwood. Not including short sales, there are currently only 2 homes for sale today vs. 46 at the worst of the market. More importantly, there are 13 pending in Quailwood. If you include short sales, there are still only 13 for sale in Quailwood.

We have begun to see signs of rising prices. Based on current demand, several subdivsions only have one or two months of inventory. If demand keeps it's current pace, the inventory will be depleted. What will happen? Will more sellers put their homes on the market? Will supply remain low until prices pop back up again? Only time will tell.

[Esenjay]

Hey Brian, do you have statistics for the Highlands Ranch (Chino Valley) subdivision?

[kimbly]

This is interesting and hopeful news! Is there any tracking of what percentage of the sales in May and June were short sales and/or foreclosures?

As respects the listings you reference in Quailwood, do you think that non-short sales are down because people can't compete with the short sales in terms of pricing? How does pricing compare to when the 46 were listed 'at the worst of the market'? How many of those 46 were short sales and/or REOs?

It's definitely an interesting time to watch the market. Going through my own foreclosure, I clearly am not buying anytime soon, but my career also involves real estate and the trending is an interest of mine. In my little 'burb east of Phoenix, we are not seeing listings go up other than short sales because no one can afford to compete with them. The short sale listings are at 70-80% of what the homes were brand new in 2001 - 2002.

I hope that positive change is in the air!!

[DellNec]

I too hope that things are improving but we need to look at this in totality. In a hurricane, there is an "eye", it's when the sun comes out, the birds start chirping, but this is short lived because the storm is about to hit again and hit hard. Many economists believe we are currently in the "eye" of the storm.

60 Minutes did an excellent story on this:

Moderator cut: copyrighted material
Do your homework before you "invest" in a home. If you plan on buying, expect a depreciating "asset", that could continue to drop in value for another 10+ years. Also, if you buy, plan on not selling/moving for about 15+ years.

Let's not forget about the guaranteed inflation that is coming. 100 out of 100 economists know that it is coming.

[BriansPerspective]

Originally Posted by Esenjay

Hey Brian, do you have statistics for the Highlands Ranch (Chino Valley) subdivision?

I do not have historical data for Highlands, but there are 19 active and 5 pending. Of the active, 12 are owner-sellers and 5 are short-sales. None are bank-owned.

[BriansPerspective]

Originally Posted by kimbly

This is interesting and hopeful news! Is there any tracking of what percentage of the sales in May and June were short sales and/or foreclosures?

Interestingly enough, in May through August, the percentages were about the same each month. Of the total sales, 60% were owner-sellers, 33% were bank-owned, and 7% were short sales.

Originally Posted by kimbly

As respects the listings you reference in Quailwood, do you think that non-short sales are down because people can't compete with the short sales in terms of pricing? How does pricing compare to when the 46 were listed 'at the worst of the market'? How many of those 46 were short sales and/or REOs?

Absolutely. A great deal of home-owners are priced out of the market because of Bank-Owned sales. (Short sales don't really count in terms of valuation, because they are such a small percentage of the total sales.) Bank-Owned sales have been a large percentage of the Quailwood market for a while. Early on, there were many unrealistic sellers who had their homes priced way above market value. Those home owners have come to see the reality and are either waiting out the market or letting their homes go to foreclosure.

Also, banks (I believe) are slowing the tide of foreclosures by postponing many of them, thereby keeping supply down. I do not know for sure if that is the goal of the banks, but that is certainly the effect. If the supply drops and demand continues, prices will rise and everyone will benefit.

Originally Posted by kimbly

It's definitely an interesting time to watch the market. Going through my own foreclosure, I clearly am not buying anytime soon, but my career also involves real estate and the trending is an interest of mine. In my little 'burb east of Phoenix, we are not seeing listings go up other than short sales because no one can afford to compete with them. The short sale listings are at 70-80% of what the homes were brand new in 2001 - 2002.

Sorry to hear about your foreclosure. Hopefully it won't be too hard on you. Don't fret too much about short-sale pricing. Short-sale prices are generally unrealistic and the homes rarely sell for the short-sale price. Many agents take a short-sale and put a rediculous price on it so they can get a quick offer. The bank will not talk to the agent unless an offer is on the table. Even with an offer, the bank is not going to give the home away. The bank will run an appraisal and counter back with a price close to the appraisal amount.

Originally Posted by kimbly

I hope that positive change is in the air!!

Me too!

[Dean Trails]

It is time to start pumping up the next bubble????

When do they start handing out the toxic mortgages?

IMHO, I believe the real estate market has a long way to go before it is 2004 again.

Real Estate won't be back to normal until employment picks up and folks have security and cash to buy a home.
The Arizona unemployment rate is at an all-time high!

[DellNec]

Originally Posted by Dean Trails

It is time to start pumping up the next bubble????

When do they start handing out the toxic mortgages?

IMHO, I believe the real estate market has a long way to go before it is 2004 again.

Remember, in the Realtor world, now is always the time to buy if you are a buyer and now is always the time to sell if you are a seller.

IMHO, buying a home today is a lose-lose proposition. You are purchasing a depreciating asset & you are going to be dumping $$$ into this depreciating asset:

Mortgage interest payments
HOA Fee's
Property Taxes
Improvements
Upkeep
Homeowners Insurance
and a host of other money.......

[BriansPerspective]

Originally Posted by DellNec

Remember, in the Realtor world, now is always the time to buy if you are a buyer and now is always the time to sell if you are a seller.

Quite the contrary. We tell people all the time that NOW is not the best time to sell. Some people do not have a choice and need to sell anyway.

Originally Posted by DellNec

IMHO, buying a home today is a lose-lose proposition. You are purchasing a depreciating asset & you are going to be dumping $$$ into this depreciating asset:

Maybe, maybe not. I do not have a crystal ball. I am merely pointing to some positive news where prices have been rising in certain subdivisions and that the supply of homes is quite low.

[Esenjay]

In many cases this is an ideal time to buy a home -- the market is in a place where homes are affordable to people who never had a chance to buy before now, because of the inflated market. So, buying a home now (or in the near future) while prices are low IS a good investment.

The only portion of the home that is a factor is the actual mortgage -- all the other items such as HOA, etc., are things you'd pay for regardless of whether the market is up or down, so listing all those items as negatives to buying is misleading.

The home I'm buying, I could not afford 3 years ago, and possibly 3 or 4 years from now, the way the market was and probably will be again. At any rate it's unlikely the market will dip so far south from where it's already at that the home I'm buying now would turn into a bad investment. So, it's still a low time in the market but not a bad time to buy, if you're in a position to do so. Terrible time to sell, but if you're trying to buy your first home then there's not much better time than now to do so.

Doesn't hurt to put things in perspective rather than line up the "facts" to support a misleading statement.