Boy! If people would just listen to me, the world would be a much better place!! (or maybe not! LOL!)
But in this case, it looks like I was right. I've been telling people that we're at the bottom of the market for about a month now, and Arizona State University's W.P. Carey School of Business agrees with me!
"
ASU study: Phoenix-area home prices “at or close to bottom”
Phoenix-area home prices are “at or close to a market bottom,” according to a new Arizona StateUniversity study that offers hope to many Valley homeowners.
The Arizona State University-Repeat Sales Index (ASU-RSI) measures changes in average Phoenix-area home prices from year to year. The latest report confirms home prices are falling at a slower and slower pace.
While Valley home prices saw a 37-percent decline in both the February and March reports, the new April 2008 to April 2009 report reveals a lesser 35-percent drop. Preliminary estimates for May and June show annual drops of 33 percent and 31 percent, respectively.
“April is the first month with a slower annual rate of decline, and the progressively smaller declines over the next two months are pretty good evidence that the worst of the price drops are in the past,” says Karl Guntermann, the Fred E. Taylor Professor of Real Estate at the W. P. Carey School of Business at Arizona State University, who calculates the ASU-RSI with research associate Adam Nowak. “While the housing market is still quite volatile, it may turn out that the low point in terms of price occurred in May, almost three years after prices peaked in the Valley.”
The current slide in home prices is the longest in Valley history at 26 months. This is the first month that Gilbert has been included in the city breakdown of the report. Gilbert and Sun City show the mildest declines in the area from April 2008 to April 2009. The worst drop was in Glendale, where prices plunged more than 40 percent in just one year.
Preliminary estimates show the median Phoenix-area home price for June is $119,000. That’s up from $115,000 in May and $117,000 in April. However, Guntermann says the large number of foreclosed properties being sold at distressed price levels suggests the median price is not likely to go up much for a while.
The ASU-RSI is based on repeat sales, the most reliable way to estimate price changes in the housing market. Repeat sales compare the prices of a single house against itself at different points in time, instead of comparing different homes with different quality factors.
You can read the full report here
What I've been seeing in the last two months is a lot of competition for "move in ready" homes. And when I say competition, I mean multiple (8 in one case) offers on a home that was ready for immediate occupancy.
The homes that are currently drawing the most attention are Bank Owned Properties. "Why?" you ask? Simply put, you get an answer out of a bank once they've foreclosed on a home that you don't get if you're trying to get Short Sale approval.
It makes a degree of sense. Once a Bank forecloses on a home, they're responsible for it entirely. They pay the taxes, insurance, and other recurring expenses instead of the home owner. They also have to worry about the property being vandalized, which is usually not a concern for an owner occupied home.
Plus, having homes on their books makes the bank look bad financially.
As a result, they want those properties off their books as quickly as they can get an offer and buyers will get an answer in a matter of days, instead of the months you can spend waiting for a short sale approval.
Short sale properties that are move in ready are getting more attention as the number of Bank-owneds dwindles, while "trash-out" short sales are just sitting.
Vanguard Platinum Realty
Erin Goldbach
Owner/Broker
602 524 0186
Erin@ErinGoldbach.com
Wow it really looks like the time to buy is now. Thanks for the great updates.
ReplyDeleteJeff Pearson
King of the Deals