Downtown and Phoenix Real Estate Market Report April 2012

It’s been rock and roll in the real estate market. As we discussed in the March real estate market and news report, we have a ridiculously low number of homes and condos to offer our home buyers. The April downtown and greater Phoenix real estate report is much of the same. The chart below is a good place to kick-off the April 2012 Phoenix residential housing market report.

This Informational Chart Looks At Active Home Listing Data From ARMLS.

Note the reduction over time. All info is based on 3 bedroom single family homes.

Area

2/2/2012

2/29/2012

3/16/2012

3/23/2012

4/11/2012

Maricopa County 9395 8451 7879 7599 7090
Phoenix 2090 1836 1699 1633 1489
Scottsdale 1688 1636 1620 1563 1462
Tempe 155 134 140 123 118
Glendale 509 380 318 323 280
Gilbert 491 423 390 372 335
Peoria 417 330 312 302 304

Overall Real Estate Market News and Opinion April 2012

wild2The general attitude of the market is best described as frenzied ciaos. Lots of people have decided the market really is at rock bottom and it’s time to buy a house. As we’ve mentioned in past articles, the bottom was reached in late September 2011. The media, that seems to hate reporting positive real estate news,  waited until 2012 to announce this fact and by the time many home buyers heard the message prices started rising fast.

According to a recent article by Clear Title, March 2012 median home prices we up 18.1% from the same time last year. Since the bottom wasn’t really reached until September most of that 18.1% has occurred in the last few months. Below are a few other stats from the same article and ARMLS that you may find interesting:

  • Active listings are down a whooping 53% from this time last year.
  • Monthly sales prices on a price per square foot basis are up 13.3% from a year ago.
  • Foreclosures numbers are falling and bank owned homes comprise  less than 10% of the inventory.
  • It is estimated that there are only about 3800 foreclosed homes that have not been put into the ARMLS for sale. This is the shadow inventory many talk about and this small number is good news.
There is both good and not so good news in our “new market’; Let’s start with some noble news
  • Higher home values will put a lot of homeowners right-side up again. This should save a few rocky marriages and keep psychotherapist bills down.
  • As more people are in a positive position they will put their homes on the market and the cycle of buying and selling homes will be more normal.
  • Higher home values will mean builders will start back to what they do, build new homes. This helps balance the market and put trades people back to work. Since jobs are key to recovery this is very good news to our local economy.
The flip side of the coin… the not so good news.
  • coin flipWe are not fans of radically changing markets. Big upward swings generally mean a downward balancing cycle. The last thing we need is another roller coaster ride. Our hope is the current upswing is put into check by somewhat cautious appraisers and bank underwriters who approve home loans. These folks are the major check & balance tool. They failed their job back in the 2004-2007 boom and we hope lessons were learned.
  • Home buyers are really hating the current market. They have to be quick as a Pronghorn Antelope or the home is likely to be gone. We’ve seen homes come on and off the market in mere hours. FYI, the Pronghorn Antelope is the fastest long distance land animal.
  • Many home buyers who need some help with closing costs are finding their offers beat out by cash buyers or those using conventional financing. This is especially frustrating for first time buyers who often don’t have a lot of cash to put down.
  • We are seeing 2005 like lotteries on some of the new build homes in the east valley. This was a bad idea back in 2005 and it still poor policy today.
The Downtown Phoenix Real Estate Market Update April 2012

The downtown Phoenix real estate market has extremely low inventory levels in all real estate products. The demand for housing is way above supply, even in the condo/townhouse market that has been pretty sluggish. Below are some bullet points:

  • The total number of single family homes for sale in the downtown PHX region today is in the 80 range.  Since we typically sell about 42 downtown homes a month, having only 80 to choose from is not very much.
  • A number of March/April single family homes sold at or above asking price. This was especially prevalent in the under 120K market where investors were struggling to find potential rental properties.
  • We expect to see a high percentage of homes put into contract in April at above asking price; Its a supply verses demand thing. The tough thing here is balancing reason and emotions when buying a home in a wild market.
  • Today’s condo/townhouse/loft inventory is down in the 30’s at the time of this article and includes a number of coops and places with prohibitive HOA fees like Crystal Point. Like single family homes, we generally see 40 or so condos sold per month in the downtown/uptown region. We believe condos where financing is available will rocket in price over the next few months.
  • cathedral townhouses phoenix azLand Lease/Coop developments like Los Olivios and Phoenix Towers are seeing a surprising number of sales. This is a clear sign that inventories are low as coops are generally cash only purchases and usually underperform in long term valuation compared to fee simple condo units.
  • Portland 2, near 7th Street and Portland,  recently broke ground on some new condo units. This is the first out-of-the-ground project we’ve seen for some time. If banks will open up project financing we should see more medium density projects coming soon.
  • Lastly, Cathedral Townhomes, an adaptive reuse project near 2nd Ave and Roosevelt sold out shortly after being placed on the market. Of course, these 1800 sq.ft. units were tasty places with features like crown moldings, wains-coating, clean design and well priced in the high 200K range. Best of all they didn’t do the stupid $400.00 per month HOA thing we see too often downtown; HOA’s at Cathedral are less than $150.00/month.

We hope this information has been helpful. If you have questions, need info on the current value of your home, wonder when the best time to buy or sell a house or want to see the coolest card trick on the planet, we are here for you, full-time and more than delighted to be your source of real estate information and services.

Gene Urban and Ron Urban
The Urban Team at Realty Executives
7600 N. 16th Street, Suite 100
Phoenix, AZ 85020
602-234-5777
Gene@UrbanTeamAZ.com or Ron@UrbanTEamAZ.com

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