Jay Shaver

Market Update February 4, 2012

Market Notes February 4, 2012: The busy season feels like it is just now starting to take hold. The first quarter of the year, or at least Jan-Apr is historically the busiest time of the year for AZ real estate and January 2012 was a little sluggish, but considering last weeks market indicators, the activity has picked up considerably. 17 homes went pending just yesterday (Friday Feb. 3) and 50 homes closed escrow last week, closing at an average of $48.40 per square foot, and bring this years sales total now to 175. There are currently 248 homes pending close of escrow and active listings dropped by nearly 10% last week and now stand at 226 available homes, down from 252, and listed at an average of $62.70 per square foot. Here are some interesting bullet points on the Arizona housing market, more specifically the Phoenix area market, which includes Maricopa: 

 - In every price range, sales prices in $/SF are now higher than a year ago.

       - Inventory is still falling below $200,000 and constraining sales volumes.

       - Above $200,000, supply is rising and demand remains relatively weak.

       - After a noticeable weak patch during the summer, prices have regained strength.

       - Lender-owned inventory is falling fast, especially at the lower price levels.

      - Short sales are overtaking foreclosures as the primary mechanism to resolve mortgage debt problems.

There is a tremendous amount of demand for those homes priced at $100K or less in Maricopa, in fact if you are currently looking for a home in that price range you can expect each home to receive multiple offers, and often sell for over list price. The key is to be the first in the door with a strong, committed offer. There are currently many cash buyers on the market, which puts those finance customers at a slight disadvantage, but with the right strategy and knowledge of the market, you can secure that home you desire. My team and I live in and work exclusively in Maricopa and often times know of homes soon to be available, or just listed, which can benefit you as the buyer, so if you would like my assistance in securing that new home, please call or email me anytime. Of the 252 homes currently available, only 58 of them are priced at, or under $100k, so inventory is tight, and demand is strong, be sure your agent is working hard for you.

Inventory at the next level, $100K - $150K is a little more plentiful, with 91 homes listed in this price range, and buyer demand is still strong but not quite as hectic as the those homes $100K and less. Case in point - of the 175 recorded sales thus far this year, 99 of them are homes under $100K, 58 are homes priced between $100K-$150K, and 18 are homes above $150K.

The inventory of distressed homes and/or bank owned homes has fallen quite a bit over the last year, however there is still a fair amount of shadow inventory remaining (those homes in default but not yet foreclosed on), in fact there are 196 short sale homes listed as AWC, meaning that they have at least one offer if not multiple offers, and historically 50% of that inventory winds up in foreclosure and emerges on the market as a bank owned home, so we are not quite through with the “housing crisis” but I believe we are certainly on the back half. In fact, Capital Economics expects the housing crisis to end this year, and one of the reasons: loosening credit. The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago. However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability. Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings. Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.” So if you have been waiting on the sidelines waiting for the right time to buy – it’s now, and I would like to help. Call or email me anytime.

Published Saturday, February 04, 2012 8:26 AM by Jay Shaver