Arizona Real Estate Market Update and Forecast for 2012

Real Estate Market Update

Statistics just released by the ARMLS system (Phoenix Valley MLS) shows encouraging trends from 2011 and into 2012.

• The supply of existing homes on the market is at the second lowest level in 11 years.
• New listings have dropped by 30,000 units from 2010
• The median price is lower than 2010.
• The number of units sold is the second highest in 11 years and second lowest in price.
• Supply and demand are becoming more in balance.
• The average days on the market for homes dropped 13% in 2011.
• Foreclosures have slowed dramatically because the lenders are looking at short sales to resolve underwater properties.
• The most underwater owners have largely been through sale or foreclosure already.

2012 Forecast

All of the above, coupled with higher numbers of jobs creation, is signaling the bottom of the market may have been reached. Arizona was 3^rd nationally in jobs creation for 2011. Many were hi-tech jobs. Homes have become more affordable and the cost of home-ownership is lower for every household after the market adjustment of the past 5 years.

Therefore, home-ownership costs have come more in line with income. Many of the trends I have listed above in the update reflect the state of the market in Maricopa County. However, as Maricopa County goes, so goes the State of Arizona. Sales in the Valley will allow those sellers to relocate to the secondary markets in the state. Jobs are likely to follow in those areas leading to more real estate sales.

Another factor that is beginning to take effect is that homeowners who sold short, went through foreclosure, or file bankruptcy during the Great Recession of 2007-2010 are beginning to have their credit healed by the passage of time. They will become a new wave of buyers. As we see a turn strengthen in the market, it is likely that interest rates will start to climb. Those who have been on the sidelines may decide to buy now rather than risk the market and mortgage interest rates rising out of their reach.  Many home buyers who where on the fence may decide that now is the time to buy and lock in a low interest rate.

We would love to help you find out what your property is worth or what your buying power is while the rates remain low. Let’s discuss how these trends will come into play for you in the next year.  C’Ann and I  are just an easy phone call away at 928-632-3906 or drop an eMail to jerry.germansen@searchonprescott.com.