Phoenix Real Estate Market Keeps Tanking (Mesa, Chandler: leasing, home builders, tech jobs)

[CheyDee]

Originally Posted by Potential_Landlord

Can you very briefly state the differences between Phoenix and Tucson from your perspective? - Only briefly as we want to keep it mostly to Phoenix here, but I think our immediate neighbor city would be of interest for us in Phoenix as well.
Thanks, PL

I've been actively watching two specific sections in NW Tucson, the Oro Valley area in general and a very small section of Marana.

While it's impossible to accurately judge anything (there or here) sight-unseen, I seem to be seeing what I think are well priced homes sitting between a couple to a few weeks, before going under contract. I also see fewer short sales listed there. Very few places seem to go under contract immediately, which leads me to believe there are less bidding wars in the sub $150k range.

When I check back a bit later to see what the homes sold for vs. their original listing prices, I am generally seeing sales under asking price. For example, one particular home I was watching that came on the market in January, listed for $139,900. It sat for approx. 3 weeks before going under contract and sold for $133k.

[Captain Bill]

Some may find the chart below interesting, as it graphically shows the "Annual Appreciation percent per Square Foot, as a percentage, back to 2001. Chart courtesy of the Cromford Report

It peaked at a high in March 2005
It hit a low, with negative annual appreciation in February 2009

It increased to get into positive appreciation territory by February 2010 and peaked in March 2010.

• The increase during the first half of 2010 was due to the first time home buyers tax credit.
• As that was about to go away, the prices decline again hitting a low of 11.3% negative annual appreciation in June 2011.

Then it began to increase again, getting into positive territory in November 2012, and continuing so that in February the annual price appreciation per square foot was 7.4%

• As of March 15, 2011 (not on the chart yet) the annual price appreciation per square foot is 10.4%

The Average Monthly sales price per square foot increased 2.2% in the last 7 days and 6.5% in the last month.

The price increases we're seeing today are the result of an extremely low inventory and high demand, and Mike Orr expects it to continue for awhile.

Mike Orr of the Cromford Report and Director of the Center for Real Estate Theory and Practice at the W P Carey School of Business, ASU, recently made this statement:

Quote= Mike Orr...."There were claims from some parties that the "robo-signing" agreement between the big 5 lenders and the states would result in more foreclosures starting.

The evidence seems to show that conclusion only seems to have applied to certain judicial foreclosure states. For Maricopa County, March foreclosure starts and trustee deeds are both down compared with the same point in February.

After 12 working days in March we are down 9% in new notices and 19% on trustee deeds compared with the first 12 working days of February

Here is a Feb 23 article by Mike Orr discussing the inventory shortage below $300,000:
https://asunews.asu.edu/20120223_business_orrreport

Here is Mike Orr's full 15 page first report for WP Carey School:
http://wpcarey.asu.edu/finance/real-...t_Jan-1202.pdf

NOTE: The data I provide is for all type homes in the Phoenix Metro Area. The data is provided in order to help interested parties in the C-D forum keep up to date on the overall condition of the Phoenix Metro Area real estate market. It is not intended to entice people to go out and buy real estate.

Buying a home is a very personal decision, and should only be made after examining one's own personal needs and financial situation. Everyone should understand that the real estate market is cyclical and real estate values go up and down. Also, the market is different in each price range, city, zip code, and community, so the market needs to be studied from the top down in order to determine "current" market value of any property.

[JoeC]

Bankrate - Top foreclosure states Feb 2012

AZ was third highest, behind CA and NV (2nd and 1st, respectively), with a rate of 1 in 312 housing units receiving a foreclosure filing in February. What effect will this have on the current market?

[jdahunt]

Joe....I saw the same thing in RealtyTrac.

If you look at the total numbers going to foreclosure though it may be skewed by the pure overall numbers of available houses.

One other thing that I believe is that there are more people wanting to go to Arizona verses California or Nevada so that will have an impact as well.

I think Arizonas only competition is going to be Florida whereas myself as well as others on here looked there first and have decided on Arizona.

Some friends of ours announced to us that they were leaving Illinois and going to San Diego, had jobs lined up and their house sold. Now I'm being told that they are backing away due to the huge financial crisis in California and they instead are now looking at Arizona.

[Captain Bill]

Originally Posted by JoeC

Bankrate - Top foreclosure states Feb 2012

AZ was third highest, behind CA and NV (2nd and 1st, respectively), with a rate of 1 in 312 housing units receiving a foreclosure filing in February. What effect will this have on the current market?

That data is for the entire State of Arizona.

It may be helpful to additionally look at data more specific to our Greater Phoenix area, or Maricopa County market.

• This Interactive Chart for Notices of Trustee Sales (NOTS), Workbook: NOTS2 (http://public.tableausoftware.com/views/NOTS2/Sheet1?:embed=y&:loadOrderID=0&:tabs=no - broken link), courtesy of the Cromford Report shows the NOTS filings for residential parcels for any year and type of dwelling you choose to select. This information is more Phoenix specific than the overall Arizona numbers.
  .
• This chart shows the actual number of Trustee Sales. It breaks them down into those that revert to the bank, and that are sold to third parties: Workbook: TD1

Notice that the Trend for both is down. That is why we are experiencing the inventory shortage; there are fewer foreclosures hitting the market, and the traditional sellers have not begun to put their homes on the market in large numbers.

One may speculate that traditional sellers will only begin to put their homes on the market when it makes better economical sense, so I would not expect to see a flood of traditional sales any time soon.

[JoeC]

Considering that over half of Arizona's population (~6.48M) lives in Maricopa Co (~3.8M), those numbers would seem to be "Valley-centric" - unless the foreclosure numbers for Tucson, Prescott, and Flagstaff are huge, and skewing the numbers.
Note that the article in question concerns foreclosure filings - not trustee sales. I have no idea how long it takes to progress from foreclosure notice to bank-owned/trustee sale - so obviously no clue as to when these foreclosures will start to show up on the market.

[Captain Bill]

Originally Posted by JoeC

Considering that over half of Arizona's population (~6.48M) lives in Maricopa Co (~3.8M), those numbers would seem to be "Valley-centric" - unless the foreclosure numbers for Tucson, Prescott, and Flagstaff are huge, and skewing the numbers.
Note that the article in question concerns foreclosure filings - not trustee sales. I have no idea how long it takes to progress from foreclosure notice to bank-owned/trustee sale - so obviously no clue as to when these foreclosures will start to show up on the market.

So we can be on the same page, the proper terminology for a Foreclosure Filing is a Notice of Trustee Sale (NOTS). I posted a chart showing the NOTS. It takes a minimum of 90 days from the time the NOTS is filed until the home can be sold at foreclosure (Trustee Sale (TS))

If the NOTS (Notices of Trustee Sale) are declining, which they are, then the TS (actual Trustee Sale) numbers will have to decline, and they are.

For me, it's best to look only at the Phoenix Metro numbers because that is our local market. And it's where I know I can get the most reliable information, both from the MLS and from the Cromford Report. Tucson, Flagstaff, etc are all completely different markets. About the only thing our markets have in common is we are in the same state, which is a non-judicial foreclosure state.

[khuntrevor]

Originally Posted by jdahunt

Joe....I saw the same thing in RealtyTrac.

If you look at the total numbers going to foreclosure though it may be skewed by the pure overall numbers of available houses.

One other thing that I believe is that there are more people wanting to go to Arizona verses California or Nevada so that will have an impact as well.

I think Arizonas only competition is going to be Florida whereas myself as well as others on here looked there first and have decided on Arizona.

Some friends of ours announced to us that they were leaving Illinois and going to San Diego, had jobs lined up and their house sold. Now I'm being told that they are backing away due to the huge financial crisis in California and they instead are now looking at Arizona.

SD is LA prices and Phoenix wages....if you can get a job. I flipped a condo in Summerlin in 2009; I could go back and buy a 3/2 for what I sold my 1/1 for (same development). Vegas is creepy. And I think you are making a very good point about AZ being the cream of the creamed markets. No need to even comment on Florida.

[jimj]

Originally Posted by jdahunt

Joe....I saw the same thing in RealtyTrac.

If you look at the total numbers going to foreclosure though it may be skewed by the pure overall numbers of available houses.

One other thing that I believe is that there are more people wanting to go to Arizona verses California or Nevada so that will have an impact as well.

I think Arizonas only competition is going to be Florida whereas myself as well as others on here looked there first and have decided on Arizona.

Some friends of ours announced to us that they were leaving Illinois and going to San Diego, had jobs lined up and their house sold. Now I'm being told that they are backing away due to the huge financial crisis in California and they instead are now looking at Arizona.

I think your friends are making the smarter move (for now). Having been born and raised in CA and as someone who does miss it unfortunately we'll never go back as I don't see them changing their socialist behavior and becoming fiscally responsible. As for AZ vs Florida, there's lot's of people who love FL, lot's of people who are still moving there or plan to so there must be something to it other than having "florida's friendliest home town"
To us the money is to be made here for now.

[Captain Bill]

Some time ago I posted information about the Mesa General Motors Proving Grounds project that will create around 100,000 high paying jobs.

I haven't driven by there lately but I found this article that shows there are some homes already starting. That project will positively affect the east valley, especially Mesa and Gilbert.

GM Proving Grounds site to boost area with 800 planned new homes - East Valley Tribune: Money

Here's a snippet from the article:

DMB expects to develop Eastmark over 30 to 40 years. It includes mid-rise buildings along Ellsworth Road and a dense commercial area by the Phoenix-Mesa Gateway Airport. Roc Arnett, president of the East Valley Partnership, said Eastmark could support “a sea of 10-story buildings” similar to what surrounds the John Wayne Airport in Orange County, California.


“They have in mind that this is going to be a major destination. It’s just going to take a while for it to develop,” Arnett said. “Eastmark is an easy name to say, but it doesn’t mean anything just yet. I think it’s going to grow in stature over time.”