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Michael OrrDirector
Center for Real Estate Theory and PracticeApril 28, 2015
Greater Phoenix Housing Market
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Euphoria
Denial
Despair
HopeSkepticism
Optimism
EnthusiasmExhilaration
Unease
Pessimism
Panic
Capitulation
Relief
Optimism
Enthusiasm
The Market Cycle
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Euphoria
Denial
Despair
HopeSkepticism
Optimism
EnthusiasmExhilaration
Unease
Pessimism
Panic
Capitulation
Relief
Optimism
Enthusiasm
The Market Cycle
2005
20082010
2015
2007
2012
2003
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normal inflation (CPI)
$134
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Dec 2004 Apr 2008
Another +39% to reach the peak!
+73%
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Most Home Prices Have Been Flatfor More than One Year
But Outlook for 2Q-4Q 2015 – Positive
Already See 5% Increase During 2Q
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range bound Dec 2013 – Feb 2015$115-$116 throughout
single family non-distressed under $500K
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2014 vs. 2013
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2015 vs. 20141Q YTD
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In 2014 Demand for Homes to Buy Was Weak While
Demand for Homes to Rent Was Very Strong
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In 2014 Demand for Homes to Buy Was Weak While
Demand for Homes to Rent Was Very Strong
In 2015 Demand for Homes to Buy Is Back to Normal
Demand for Homes to Rent Remains Strong
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Prediction Is Very Difficult, Especially About the Future
- Neils Bohr (1885-1962)
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Balanced Market
Seller’s Market
Buyer’s Market
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Long term average
Next data released July 28
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+18%
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-1%
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+25%
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+40%
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+25%
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+17%
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+0%
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Priced Under $200,000
5,824
25,153
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Priced Over $500,000
5,051
3,623
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Priced $200,000 to $500,0009,717
7,716
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Situation Summary – April 2015
• Supply is well below normal (79% of normal) • Demand is normal & growing (102% of normal)• AZ loan delinquency below normal at 4.4%• Foreclosures well below long term average• Lending rules starting to loosen a bit• Mid range market heating up• Very high end market also strong• Economy and jobs continue to improve• Time to change from relief to optimism
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Michael OrrDirector
Center for Real EstateTheory and Practice