metro phoenix economic snapshot mid year update heilman
DESCRIPTION
MPES 2010 Mid YearTRANSCRIPT
602.400.0250 [email protected]
RE/MAX Sun Properties16704 E. Avenue of the Fountains #101 • Fountain Hills, AZ 85268
www.MyHassleFreeListings.com
Economic ForecastRain or Shine?
Local Housing Market Who’s Buying & What’s Selling
M E T R O P H O E N I X
Recession Recovery: Steady or Sporadic?
M I D - Y E A R U P D A T E
If your home is currently listed, this is not a solicitation for that listing. Produced by Desert Lifestyle Publishing • 480.460.0996 • www.DesertLifestyle.net
January-June 2010 Average Sales Price By City
Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.(Single-Family Residences)
Scottsdale: $552,027
Mesa: $166,238
Chandler: $223,088
Peoria: $182,312
Carefree: $769,102
Cave Creek: $369,248
Litchfield Park: $206,415
Paradise Valley: $1,458,505
Fountain Hills: $519,651
Glendale: $133,694
Phoenix: $148,161
Gilbert: $212,772
Tempe: $210,123
As a proud Valley resident, I am pleased to specialize my real estate craft in this community. Turn to me for market facts and statistics, questions about buying or selling, or for “in-the-know” referrals for local goods and services!
WHY WORK WITH ME? Buyers and sellers in today’s challenging market need an experienced, knowledgeable REALTOR now more than ever before. Choosing the wrong agent can make or break your entire transaction. Choosing an agent that excels in the industry, has your best interests at heart and can serve as a trusted advisor for you is critical.
YOU CAN HAVE CONFIDENCE IN MY EXPERTISE How do you know a REALTOR is up-to-date with the latest skills necessary in the industry? I believe in continuing education to keep up with today’s Real Estate trends and have completed my CRS (Certified Residential Specialist), GRI (Graduate of Realtors Institute), ABR (Accredited Buyers Representative) and my CDPE (Certified Distressed Property Expert) designations so that I can more effectively represent you, my client.
HOW IS WORKING WITH ME A BENEFIT TO YOU? I believe in empowering my clients with INFORMATION. I will be available to answer all of your questions in a timely and informed manner, drawing on all of my resources. I will listen to all of your needs and objectives and work with you to meet that goal. I also offer a “LOVE it or leave it GUARANTEE!” Contact me to hear more about it!
PROFESSIONAL ASSOCIATIONS• Active Arizona Real Estate License • Active member of the National Association of REALTORS®, Arizona Association of REALTORS®, and Scottsdale Area Association of REALTORS® • Board Member of the Fountain Hills Chamber of Commerce• Member of the Fountain Hills Noon Kiwanis. • Member of StarPower Systems; a top producing real estate agent training network
January-June 2010 Sales Statistics By Zip CodeZip Code Average Days On List/Sell # Sales Price Market Price Ratio Closed
85004..............................................$261,750 ................. 124 ..................87% ...........................5
85008................................................$85,625 .................. 60 ...................98% .........................191
85013..............................................$176,457 .................. 74 ...................96% .........................112
85016..............................................$226,612 .................. 72 ...................93% .........................194
85018..............................................$437,363 ................. 107 ..................93% .........................242
85032..............................................$145,523 .................. 70 ...................97% .........................498
85044..............................................$243,196 ................. 109 ..................96% .........................243
85086..............................................$233,633 .................. 82 ...................98% .........................736
85087..............................................$213,614 .................. 94 ...................98% .........................124
85205..............................................$152,987 .................. 83 ...................96% .........................332
85212..............................................$173,641 .................. 76 ...................99% .........................302
85226..............................................$226,326 .................. 73 ...................97% .........................239
85248..............................................$294,031 ................. 102 ..................95% .........................393
85251..............................................$286,054 .................. 75 ...................91% .........................112
85253...........................................$1,463,107 ................. 214 ..................89% .........................172
85254..............................................$313,744 .................. 92 ...................96% .........................376
85255..............................................$728,373 ................. 121 ..................93% .........................512
85257..............................................$171,129 .................. 78 ...................97% .........................177
85258..............................................$515,006 ................. 138 ..................92% .........................151
85260..............................................$443,988 ................. 112 ..................87% .........................206
85266..............................................$654,688 ................. 151 ..................93% .........................190
85282..............................................$167,100 .................. 74 ...................96% .........................210
85283..............................................$175,629 .................. 80 ...................95% .........................154
85284..............................................$371,892 .................. 89 ...................96% .........................121
85296..............................................$195,481 .................. 69 ...................98% .........................500
85326................................................$93,736 .................. 69 ...................99% .........................971
85340..............................................$206,415 .................. 85 ...................97% .........................364
Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.(Single-Family Residences)
RAIN OR SHINE? Justasameteorologistpredictsweatherpatterns,economistsusedataandindicatorstodeterminethestateofoureconomy.So,asfarasoureconomygoes,whatcanweexpectfortheremainderof2010:Rainorshine?Whileopinionsvaryamongexperts,thecommonconsensusappearstobeaforecastforpartlysunnyskieswithachanceofshowers. Asbeatenandbatteredasmanyofusfeeltoday,it’sencouragingtonotethattheUSeconomyisinabetterpositiontodaythanayearoreventwoyearsago.Whilethegainswe’veexperiencedhavebeengradualandincremental,theyaresolidenoughthattheyshouldprovetoberealanddurable.
THE SUNNY SIDE Arguablythemostcriticalcomponentofourrecoveryisemploymentandwe’veseenapickupinnotonlyemployment,butalsoincome.Joblosseshaveslowedconsiderablyandemployersarebeginningtoaddtotheirworkforce,albeitslowly.Further,hourlywageshaveincreasedby3.5%sinceAugust2007. TheLaborDepartmentreleasedajobopeningsreportforAprilwhichshowsthenumberofjobsadvertisedat3.1million–themostopeningssinceDecember2008.HereinthePhoenixarea,moreemployersareplanningtohireworkersinthethirdquarterthanareplanningtolayoff,accordingtoaManpowerEmploymentOutlooksurvey.Thatmakesthreeconsecutivequarterswithaplannednetgaininlocalemployment. Theeconomicrecoveryisgainingstrengthfromthebiggestriseinconstructionspendinginadecadeandthe10thstraightmonthofexpansionformanufacturers.Alsohelpingtodrivethegrowthisbusinessspendingandtheneedtoreplenishleaninventories. Exportsareexpectedtoreturntoprerecessionlevels,aswe’veseenanexpansionbymorethan14%in2010,thefastestpacesince1988.SalestoCanada,MexicoandAsiawillrecovermorequickly;whileexportstoEuropewillclimbslowerduetothefinancialturmoilinthatpartoftheworld. Alsoplayingaroleinourrecovery:Risingconsumerconfidence.TheConferenceBoardConsumerConfidenceIndexhasincreasedinrecentmonths.Asofpresstime,theIndexnowstandsat63.3.Themonthlyindexiscreepingupfromthelowof55duringthefinancialcrisistotheprerecessionmarkofnearly100.Consumersarebeginningtomakepurchases
again.Weshouldseeabouta2.5%increaseinconsumerspendingthisyear.Modest,butatleastit’spositive.Addingtothepositivetrend,Americans’debtlevelsandsavingsareimprovingandhouseholdnetworthisupoverlastyear.Thingsaremovingintherightdirection.
CLOUDY WITH A CHANCE OF RAIN Whilepositiveemploymenttrendsmayshowasignforrecovery,thefactthatsomanyAmericansarestilloutofworkisacontinualdragontherecovery.Someexpertsbelieveitwilltakeuntillate2012torecoverthejobslostinthisrecessionanduntil2014toreturntoamorenormal5-6%unemploymentrate.Withmillionsoutofwork,wecan’texpectconsumerspendingtoincreasetoprerecessionlevelsanytimesoon. Secondly,untilcreditavailabilityforconsumersaswellasbusinessesloosensup,it’llbedifficultforoureconomytogrow.SmallbusinessemployeesaccountfornearlyhalfofalljobsintheUS.Untilbusinessesareabletosecureneededfinancing,theremaybeadelayinfurtherhiringandexpenditures.
WILDCARDS Thevolatilestockmarket,theEuropeanfinancialcrisis,SB1070….theseareallissuesloomingwithuncertaintythatmayormaynotdragusintoa“double-dip”recessionoraffectourrecovery.Asweneartheendoftheyear,we’llhaveabetterideaastotheimpactornon-impactoftheseissues.
INTEREST RATES & THE TAX CREDIT Mortgageinterestratesarestillatamazinglylowlevels.Atthebeginningoftheyear,theFedwaspurchasingmortgage-backedsecurities,whichkeptrateslow.Whenthatprogramended,therewasspeculationthatwe’dseeaspikeinrates.However,justtheoppositehasoccurred.InterestrateshavefallenastheEuropeanfinancialturmoilhasboostedinternationaldemandforUSgovernmentsecurities. TheFirst-TimeHomebuyerTaxCreditandExistingHomebuyerTaxCreditintroducedin2009andextendedinto2010hasdonejustwhatitwasdesignedtodo:Stimulatehomesales.Nationallyaswellaslocally,buyerscameoutinforcetotakeadvantageofthegenerousgovernmentprogram.Nowthattheincentiveisgone,canthehousingmarketsustainits
momentum?Lowinterestrates,attractivehomepricesandrisingconsumerconfidenceshouldplayaroleincontinuedhomesalesfortheremainderof2010.
THE ECONOMIC RECOVERY: SPEEDY OR SPORADIC? ResearchersfortheFederalReserveBankofSanFranciscoarepredictingthattherecoveryfromthisrecessionwillbefasterthanafterpreviousrecessions.JohnC.Williams,directorofresearchattheFederalReserveBank,believesthattheincreaseinhome,carandretailsalespointtoafastrecovery.“Iseenosignsofadoubledip.Theeconomycontinuestogainmomentum,andconsumerspendingandbusinessinvestmentcontinuetoimprove,”Williamssaid. Ontheotherhand,FederalReserveChairmanBenBernankepredictsasloweconomicrecoveryandsaidthatinterestrateswilllikelyriseevenbeforeemploymentrises.“Eventhoughtechnicallywe’llbeinrecoveryandtheeconomywillbegrowing,unemploymentwillstillbehighforawhileandthatmeansthatalotofpeoplewillbeunderfinancialstress,”Bernankeexplained. Sotheforecastmovingforwardfortheremainderof2010aspartlysunnywithachanceofshowersdepictsaneconomythat’sforgingaheadandshowingimprovement;buttherearestillseveralindicatorsthatcouldsendalittlerainontheparadebeforewemakeittobrightandsunnyskiesonceagain.
HOME VALUES Thetopicofcurrenthomevaluesisenoughtomakeanyhomeownercringe.TheMetroPhoenixareahasexperienceda52%decreaseinhomevaluesfromitshighinJune2006.Infact,figuresfromtheFederalHousingFinanceAgencyshowthathomevaluesinthelastyeardroppedmoreinArizonathaninanyotherstate.MaricopaandPinalcounties,whichmakeupMetroPhoenix,sawadecreaseof17.6%overthelastyear.Whencomparedtothenationalindexofa3.1%declineinhomevalues,it’sclearthatourarea,onceappreciatingatarecordpace,hassuffered. Nowontothegoodnews.Withinthepastyear,we’veseenrecordsalesactivityparticularlyinthelower-price-pointproperties.Manyofthoselistingsexperiencedmultipleoffersandsalesabovelistprice.Wearenowseeingstabilizationandpriceappreciationinthelower-endhomemarket,andnowevenataperingoffofpricedeclinesintheluxurymarket.JayButler,ASUrealestateprofessorsaid,“Ayearago,peoplefoundalotofinexpensivehomesavailable,eitherthroughforeclosures,shortsales,whatever.Thesehavebeensortofcleanedup,sowe’removinguptheladderofhomeprices.” RecentlytheArizonaStateUniversity-RepeatSalesIndexmarkedthesecondconsecutivemonthinwhichtheindexpostedagainratherthanadecline.Thehomepriceindexhadbeenfallingforthepastthreeyears,butshoweda2.7%gaininstead.Mediansalespricesforsingle-familyhomeshaveriseneachmonthduringthefirsthalfof2010(seethechart“January–June2010SalesStatistics”).Homevaluesarecertainlymovingintherightdirection. Theluxurymarket,whichtypicallylagsbehindthelower-endmarket,isnowshowingsmallsignsofimprovement.Withhigherconsumerconfidence,improvementwithournationaleconomyandwealthyindividualsunaffectedbyunemploymentsteadilymovingoffthesidelines,theluxurymarketisbeginningtoseeachangeforthebetter.
InformationgatheredfromTheCromfordReport,alocalrealestateresearchfirm,showsthathomesinthe$1M-$1.5Mmarketnowsitata22-monthsupplyvs.a52-monthsupplyinApril2009anda93-monthsupplyinDecember2008. Needsomemoregoodnews?Realestateiscyclical.Evenwiththerecentsteepdropinprices,mostArizonahomesareworthalmostdoubletodaythanwhattheywereworthin1991.Canweexpecthomepricestodoubleagain?Considerthis:Homepriceshavebeendoublingapproximatelyevery12-15yearsoverthelast100years.PopulationgrowthprojectionsfortheMetroPhoenixareacallforover55,000newhomeseachyearforthenext10yearstosatisfydemand.(Seethechart“MetroPhoenixPopulationandHousingNeedsForecast”.)ThedesirableValleyoftheSunwillbeadestinationfornewhomeownersfordecadestocome.
DISTRESSED PROPERTIES Forthepast18-24months,wecouldn’tdiscussourlocalhousingmarketwithoutthetopicofbank-ownedorforeclosureproperties.Thesedistressedpropertieshavebecomeanunwelcome,stablepartofourhousinglandscapeandhavehadanimpactonsupply&demand,andhomevaluesineverypartoftheValleyandineverypricepoint. Today,theamountofsaleswe’reseeingfromforeclosuresisfallingatasteadyrate.Foreclosuresaleshavedominatedthemix,withshortsalesand“normal”(consideredneitherashortsalenorforeclosure)saleslaggingbehind.Thepeakforforeclosureresaleswas66.2%inMarch2009.We’renowseeingforeclosuresalesaround33%.“Itappearsforeclosuresmayhavefinallymadetheirdownwardturn,”saidTomRuff,analystforTheInformationMarket.Lendershaveincreasinglysteereddistressedhomeownersintoforeclosurealternativessuchasloanmodificationsandshortsales.
WHO’S BUYING AND WHAT’S SELLING? Thegovernmenttaxcreditdeadlinehelpedtofuelpurchasesofhomesunderthe$150,000mark,manybyfirst-timehomebuyers.Now,inthelatterpartof2010,thereisasmallerpercentageofhomessellinginthelowerpriceranges.Earlierintheyear,investorsmadeupalargeamountofhomepurchasers,nowitappearsthattherearemorelong-termbuyersvs.speculativebuyers.Today,morebuyersarefinancingtheirhomeswithlong-termmortgagesandwiththeintentoflivinginthem. Therehasalsobeenashiftinout-of-statebuyers.Canadiansrepresentthedominategroupofbuyers,dethroningCaliforniansaftermanyyears.Californiadidcomeinsecondhowever,withWashingtonstatethird.MidwesternerscontinuetopurchaseheavilyintheValleyaswell.
WHAT’S IN STORE FOR OUR HOUSING MARKET? Thehealthofourmarketdependsmainlyonemploymentandthelocaljobmarket.Secondly,thereneedstobemarkedimprovementwithhousingmarketsacrossthenation,asmanywould-beValleyhomebuyersneedtoselltheirhomesbeforetheycanmigratehere.Also,thepossibilityoffutureforeclosuresfloodingthemarket,particularlywiththeexpectationofmillionsofARMsresettingin2011causinganewwaveofdistressedborrowers,mayhaveanimpact. Ifcurrenttrendscontinue,we’llseemodestbutsteadypriceappreciation,andmorehomessellingviashortsalesandnon-distressedsales.Withwhatexpertscalltheofficial“bottomingout”ofourmarketinAprilof2009,everygainandeachsuccesssincethenisbuildingconfidenceamongconsumers–whichisexactlywhatourmarketneedstogetbackontrack.
R E S I D E N T I A L R E A L E S TAT E
G E N E R A L E C O N O M I C S N A P S H OT
Gross Domestic Product .......................... 3.3%
Nonfarm Payroll Employment (change in millions) .................................. 1.3
Unemployment Rate .............................. 9.6%
S&P 500 Index Price (year end) ............... 1225
Personal Consumption ........................... 2.6%
Business Capital Investment Growth ....... 3.0%
Housing Starts (millions) ........................... 0.7
New Home Sales (millions) ........................ 0.4
Existing Home Sales (millions) ................... 5.3
State & Local Govt. Spending ................. -1.4%Source: SIFMA’s (Securities Industry and Financial Markets Association) Mid-Year 2010 Economic Outlook.
2010 Economic Forecasts
January - June 2010 Sales StatisticsSingle-Family Homes | Metro Phoenix
MedianSalesPrice Avg.DaysonMarket NumberofSalesJanuary .............. $129,900 ...................................86 ................................. 4,855February ............. $131,000 ..................................95 ................................. 5,440March ................. $135,589 ..................................96 ................................. 7,440April ................... $135,838 ..................................93 ................................. 7,774May .................... $137,990 ..................................92 ................................. 7,679June ................... $135,000 ...................................95 ................................. 7,885
Source: ARMLS. Information is deemed reliable but not guaranteed. Data maintained by ARMLS may not reflect all real estate activity in the market.
Top 10 Fastest Growing U.S. Counties1. Kendall County, IL (Chicago) .........................92.1%2.PinalCounty,AZ(Phoenix)................ 89.7%3. Rockwall County, TX (Dallas) ........................88.9%4. Flagler County, FL (Jacksonville) ...................83.9%5. Loudon County, VA (Washington, D.C.) .........77.6%
6. Forsyth County, GA (Atlanta) ........................77.4%7. Lincoln County, SD (Sioux Falls) ................... 70.7%8. Paulding County, GA (Atlanta) ......................67.4%9. Williamson County, TX (Austin) .....................64.3%10. Douglas County, CO (Denver) ......................64.0%
Source: US Census Bureau
Metro Phoenix Population & Housing Needs Forecast 2010 2020 2030Population ....................... 4,388,536 .................. 5,766,480 .................... 7,453,910 Annual % growth ................. 3.0% .......................... 2.8% ............................2.6%Change over decade ............................................ 1,377,944 .................... 1,687,430 New units each year ...............................................55,120 ........................ 67,480
Source: U of A, Elliott D. Pollack & Company. New units each year based on 2.5 persons per household.
Yearly Market ComparisonJan-June 2009 vs. Jan-June 2010 | Single-Family Homes
NUMBEROFSOLDLISTINGS DOLLARVOLUMEOFSOLDLISTINGS MEDIANSALEPRICE 2009 2010 Diff Chg 2009 2010 Diff Chg 2009 2010 Diff ChgJanuary ...... 4,230 ........ 4,853 ......... 623 ..........14.7% $ 777,731,941 ............ $ 911,304,246 ........... 133,572,305 ............ 17.1% 130,000 ...........129,900........-100 .......... -0.1%February ..... 4,849 ........ 5,432 ......... 583 ..........12.0% $ 859,187,212 ............ $ 1,013,402,466 ........ 154,215,254 ............ 17.9% 127,000 ...........131,000........4,000 ........ 3.1%March ......... 6,827 ........ 7,437 ......... 610 ..........8.9% $ 1,100,011,643 ......... $ 1,412,236,023 ........ 312,224,380 ............ 28.3% 120,000 ...........135,700........15,700 ...... 13.1%April ........... 7,601 ........ 7,766 ......... 165 ..........2.2% $ 1,227,951,267 ......... $ 1,421,144,753 ........ 193,193,486 ............ 15.7% 117,500 ...........135,950........18,450 ...... 15.7%May ............ 8,161 ........ 7,662 ......... -499 ........-6.1% $ 1,367,855,390 ......... $ 1,443,694,329 ........ 75,838,939 .............. 5.5% 121,500 ...........137,900........16,400 ...... 13.5%June ........... 8,154 ........ 4,724 ......... -3,430 .....-42.1% $ 1,440,058,524 ......... $ 939,545,285 ........... -500,513,239 ........... -34.8% 130,000 ...........137,000........7,000 ........ 5.4%
Source: ARMLS. Information is deemed reliable but not guaranteed. Data maintained by ARMLS may not reflect all real estate activity in the market.
Housing Affordability IndexGreater Phoenix Area
69.5 49.3 26.6 33.2 65.3 83.6 81.9 2000 Q1 2005 Q2 2006 Q3 2007 Q3 2008 Q2 2009 Q2 2010 Q1
Source: NAHB Housing Opportunity Index
RAIN OR SHINE? Justasameteorologistpredictsweatherpatterns,economistsusedataandindicatorstodeterminethestateofoureconomy.So,asfarasoureconomygoes,whatcanweexpectfortheremainderof2010:Rainorshine?Whileopinionsvaryamongexperts,thecommonconsensusappearstobeaforecastforpartlysunnyskieswithachanceofshowers. Asbeatenandbatteredasmanyofusfeeltoday,it’sencouragingtonotethattheUSeconomyisinabetterpositiontodaythanayearoreventwoyearsago.Whilethegainswe’veexperiencedhavebeengradualandincremental,theyaresolidenoughthattheyshouldprovetoberealanddurable.
THE SUNNY SIDE Arguablythemostcriticalcomponentofourrecoveryisemploymentandwe’veseenapickupinnotonlyemployment,butalsoincome.Joblosseshaveslowedconsiderablyandemployersarebeginningtoaddtotheirworkforce,albeitslowly.Further,hourlywageshaveincreasedby3.5%sinceAugust2007. TheLaborDepartmentreleasedajobopeningsreportforAprilwhichshowsthenumberofjobsadvertisedat3.1million–themostopeningssinceDecember2008.HereinthePhoenixarea,moreemployersareplanningtohireworkersinthethirdquarterthanareplanningtolayoff,accordingtoaManpowerEmploymentOutlooksurvey.Thatmakesthreeconsecutivequarterswithaplannednetgaininlocalemployment. Theeconomicrecoveryisgainingstrengthfromthebiggestriseinconstructionspendinginadecadeandthe10thstraightmonthofexpansionformanufacturers.Alsohelpingtodrivethegrowthisbusinessspendingandtheneedtoreplenishleaninventories. Exportsareexpectedtoreturntoprerecessionlevels,aswe’veseenanexpansionbymorethan14%in2010,thefastestpacesince1988.SalestoCanada,MexicoandAsiawillrecovermorequickly;whileexportstoEuropewillclimbslowerduetothefinancialturmoilinthatpartoftheworld. Alsoplayingaroleinourrecovery:Risingconsumerconfidence.TheConferenceBoardConsumerConfidenceIndexhasincreasedinrecentmonths.Asofpresstime,theIndexnowstandsat63.3.Themonthlyindexiscreepingupfromthelowof55duringthefinancialcrisistotheprerecessionmarkofnearly100.Consumersarebeginningtomakepurchases
again.Weshouldseeabouta2.5%increaseinconsumerspendingthisyear.Modest,butatleastit’spositive.Addingtothepositivetrend,Americans’debtlevelsandsavingsareimprovingandhouseholdnetworthisupoverlastyear.Thingsaremovingintherightdirection.
CLOUDY WITH A CHANCE OF RAIN Whilepositiveemploymenttrendsmayshowasignforrecovery,thefactthatsomanyAmericansarestilloutofworkisacontinualdragontherecovery.Someexpertsbelieveitwilltakeuntillate2012torecoverthejobslostinthisrecessionanduntil2014toreturntoamorenormal5-6%unemploymentrate.Withmillionsoutofwork,wecan’texpectconsumerspendingtoincreasetoprerecessionlevelsanytimesoon. Secondly,untilcreditavailabilityforconsumersaswellasbusinessesloosensup,it’llbedifficultforoureconomytogrow.SmallbusinessemployeesaccountfornearlyhalfofalljobsintheUS.Untilbusinessesareabletosecureneededfinancing,theremaybeadelayinfurtherhiringandexpenditures.
WILDCARDS Thevolatilestockmarket,theEuropeanfinancialcrisis,SB1070….theseareallissuesloomingwithuncertaintythatmayormaynotdragusintoa“double-dip”recessionoraffectourrecovery.Asweneartheendoftheyear,we’llhaveabetterideaastotheimpactornon-impactoftheseissues.
INTEREST RATES & THE TAX CREDIT Mortgageinterestratesarestillatamazinglylowlevels.Atthebeginningoftheyear,theFedwaspurchasingmortgage-backedsecurities,whichkeptrateslow.Whenthatprogramended,therewasspeculationthatwe’dseeaspikeinrates.However,justtheoppositehasoccurred.InterestrateshavefallenastheEuropeanfinancialturmoilhasboostedinternationaldemandforUSgovernmentsecurities. TheFirst-TimeHomebuyerTaxCreditandExistingHomebuyerTaxCreditintroducedin2009andextendedinto2010hasdonejustwhatitwasdesignedtodo:Stimulatehomesales.Nationallyaswellaslocally,buyerscameoutinforcetotakeadvantageofthegenerousgovernmentprogram.Nowthattheincentiveisgone,canthehousingmarketsustainits
momentum?Lowinterestrates,attractivehomepricesandrisingconsumerconfidenceshouldplayaroleincontinuedhomesalesfortheremainderof2010.
THE ECONOMIC RECOVERY: SPEEDY OR SPORADIC? ResearchersfortheFederalReserveBankofSanFranciscoarepredictingthattherecoveryfromthisrecessionwillbefasterthanafterpreviousrecessions.JohnC.Williams,directorofresearchattheFederalReserveBank,believesthattheincreaseinhome,carandretailsalespointtoafastrecovery.“Iseenosignsofadoubledip.Theeconomycontinuestogainmomentum,andconsumerspendingandbusinessinvestmentcontinuetoimprove,”Williamssaid. Ontheotherhand,FederalReserveChairmanBenBernankepredictsasloweconomicrecoveryandsaidthatinterestrateswilllikelyriseevenbeforeemploymentrises.“Eventhoughtechnicallywe’llbeinrecoveryandtheeconomywillbegrowing,unemploymentwillstillbehighforawhileandthatmeansthatalotofpeoplewillbeunderfinancialstress,”Bernankeexplained. Sotheforecastmovingforwardfortheremainderof2010aspartlysunnywithachanceofshowersdepictsaneconomythat’sforgingaheadandshowingimprovement;buttherearestillseveralindicatorsthatcouldsendalittlerainontheparadebeforewemakeittobrightandsunnyskiesonceagain.
HOME VALUES Thetopicofcurrenthomevaluesisenoughtomakeanyhomeownercringe.TheMetroPhoenixareahasexperienceda52%decreaseinhomevaluesfromitshighinJune2006.Infact,figuresfromtheFederalHousingFinanceAgencyshowthathomevaluesinthelastyeardroppedmoreinArizonathaninanyotherstate.MaricopaandPinalcounties,whichmakeupMetroPhoenix,sawadecreaseof17.6%overthelastyear.Whencomparedtothenationalindexofa3.1%declineinhomevalues,it’sclearthatourarea,onceappreciatingatarecordpace,hassuffered. Nowontothegoodnews.Withinthepastyear,we’veseenrecordsalesactivityparticularlyinthelower-price-pointproperties.Manyofthoselistingsexperiencedmultipleoffersandsalesabovelistprice.Wearenowseeingstabilizationandpriceappreciationinthelower-endhomemarket,andnowevenataperingoffofpricedeclinesintheluxurymarket.JayButler,ASUrealestateprofessorsaid,“Ayearago,peoplefoundalotofinexpensivehomesavailable,eitherthroughforeclosures,shortsales,whatever.Thesehavebeensortofcleanedup,sowe’removinguptheladderofhomeprices.” RecentlytheArizonaStateUniversity-RepeatSalesIndexmarkedthesecondconsecutivemonthinwhichtheindexpostedagainratherthanadecline.Thehomepriceindexhadbeenfallingforthepastthreeyears,butshoweda2.7%gaininstead.Mediansalespricesforsingle-familyhomeshaveriseneachmonthduringthefirsthalfof2010(seethechart“January–June2010SalesStatistics”).Homevaluesarecertainlymovingintherightdirection. Theluxurymarket,whichtypicallylagsbehindthelower-endmarket,isnowshowingsmallsignsofimprovement.Withhigherconsumerconfidence,improvementwithournationaleconomyandwealthyindividualsunaffectedbyunemploymentsteadilymovingoffthesidelines,theluxurymarketisbeginningtoseeachangeforthebetter.
InformationgatheredfromTheCromfordReport,alocalrealestateresearchfirm,showsthathomesinthe$1M-$1.5Mmarketnowsitata22-monthsupplyvs.a52-monthsupplyinApril2009anda93-monthsupplyinDecember2008. Needsomemoregoodnews?Realestateiscyclical.Evenwiththerecentsteepdropinprices,mostArizonahomesareworthalmostdoubletodaythanwhattheywereworthin1991.Canweexpecthomepricestodoubleagain?Considerthis:Homepriceshavebeendoublingapproximatelyevery12-15yearsoverthelast100years.PopulationgrowthprojectionsfortheMetroPhoenixareacallforover55,000newhomeseachyearforthenext10yearstosatisfydemand.(Seethechart“MetroPhoenixPopulationandHousingNeedsForecast”.)ThedesirableValleyoftheSunwillbeadestinationfornewhomeownersfordecadestocome.
DISTRESSED PROPERTIES Forthepast18-24months,wecouldn’tdiscussourlocalhousingmarketwithoutthetopicofbank-ownedorforeclosureproperties.Thesedistressedpropertieshavebecomeanunwelcome,stablepartofourhousinglandscapeandhavehadanimpactonsupply&demand,andhomevaluesineverypartoftheValleyandineverypricepoint. Today,theamountofsaleswe’reseeingfromforeclosuresisfallingatasteadyrate.Foreclosuresaleshavedominatedthemix,withshortsalesand“normal”(consideredneitherashortsalenorforeclosure)saleslaggingbehind.Thepeakforforeclosureresaleswas66.2%inMarch2009.We’renowseeingforeclosuresalesaround33%.“Itappearsforeclosuresmayhavefinallymadetheirdownwardturn,”saidTomRuff,analystforTheInformationMarket.Lendershaveincreasinglysteereddistressedhomeownersintoforeclosurealternativessuchasloanmodificationsandshortsales.
WHO’S BUYING AND WHAT’S SELLING? Thegovernmenttaxcreditdeadlinehelpedtofuelpurchasesofhomesunderthe$150,000mark,manybyfirst-timehomebuyers.Now,inthelatterpartof2010,thereisasmallerpercentageofhomessellinginthelowerpriceranges.Earlierintheyear,investorsmadeupalargeamountofhomepurchasers,nowitappearsthattherearemorelong-termbuyersvs.speculativebuyers.Today,morebuyersarefinancingtheirhomeswithlong-termmortgagesandwiththeintentoflivinginthem. Therehasalsobeenashiftinout-of-statebuyers.Canadiansrepresentthedominategroupofbuyers,dethroningCaliforniansaftermanyyears.Californiadidcomeinsecondhowever,withWashingtonstatethird.MidwesternerscontinuetopurchaseheavilyintheValleyaswell.
WHAT’S IN STORE FOR OUR HOUSING MARKET? Thehealthofourmarketdependsmainlyonemploymentandthelocaljobmarket.Secondly,thereneedstobemarkedimprovementwithhousingmarketsacrossthenation,asmanywould-beValleyhomebuyersneedtoselltheirhomesbeforetheycanmigratehere.Also,thepossibilityoffutureforeclosuresfloodingthemarket,particularlywiththeexpectationofmillionsofARMsresettingin2011causinganewwaveofdistressedborrowers,mayhaveanimpact. Ifcurrenttrendscontinue,we’llseemodestbutsteadypriceappreciation,andmorehomessellingviashortsalesandnon-distressedsales.Withwhatexpertscalltheofficial“bottomingout”ofourmarketinAprilof2009,everygainandeachsuccesssincethenisbuildingconfidenceamongconsumers–whichisexactlywhatourmarketneedstogetbackontrack.
R E S I D E N T I A L R E A L E S TAT E
G E N E R A L E C O N O M I C S N A P S H OT
Gross Domestic Product .......................... 3.3%
Nonfarm Payroll Employment (change in millions) .................................. 1.3
Unemployment Rate .............................. 9.6%
S&P 500 Index Price (year end) ............... 1225
Personal Consumption ........................... 2.6%
Business Capital Investment Growth ....... 3.0%
Housing Starts (millions) ........................... 0.7
New Home Sales (millions) ........................ 0.4
Existing Home Sales (millions) ................... 5.3
State & Local Govt. Spending ................. -1.4%Source: SIFMA’s (Securities Industry and Financial Markets Association) Mid-Year 2010 Economic Outlook.
2010 Economic Forecasts
January - June 2010 Sales StatisticsSingle-Family Homes | Metro Phoenix
MedianSalesPrice Avg.DaysonMarket NumberofSalesJanuary .............. $129,900 ...................................86 ................................. 4,855February ............. $131,000 ..................................95 ................................. 5,440March ................. $135,589 ..................................96 ................................. 7,440April ................... $135,838 ..................................93 ................................. 7,774May .................... $137,990 ..................................92 ................................. 7,679June ................... $135,000 ...................................95 ................................. 7,885
Source: ARMLS. Information is deemed reliable but not guaranteed. Data maintained by ARMLS may not reflect all real estate activity in the market.
Top 10 Fastest Growing U.S. Counties1. Kendall County, IL (Chicago) .........................92.1%2.PinalCounty,AZ(Phoenix)................ 89.7%3. Rockwall County, TX (Dallas) ........................88.9%4. Flagler County, FL (Jacksonville) ...................83.9%5. Loudon County, VA (Washington, D.C.) .........77.6%
6. Forsyth County, GA (Atlanta) ........................77.4%7. Lincoln County, SD (Sioux Falls) ................... 70.7%8. Paulding County, GA (Atlanta) ......................67.4%9. Williamson County, TX (Austin) .....................64.3%10. Douglas County, CO (Denver) ......................64.0%
Source: US Census Bureau
Metro Phoenix Population & Housing Needs Forecast 2010 2020 2030Population ....................... 4,388,536 .................. 5,766,480 .................... 7,453,910 Annual % growth ................. 3.0% .......................... 2.8% ............................2.6%Change over decade ............................................ 1,377,944 .................... 1,687,430 New units each year ...............................................55,120 ........................ 67,480
Source: U of A, Elliott D. Pollack & Company. New units each year based on 2.5 persons per household.
Yearly Market ComparisonJan-June 2009 vs. Jan-June 2010 | Single-Family Homes
NUMBEROFSOLDLISTINGS DOLLARVOLUMEOFSOLDLISTINGS MEDIANSALEPRICE 2009 2010 Diff Chg 2009 2010 Diff Chg 2009 2010 Diff ChgJanuary ...... 4,230 ........ 4,853 ......... 623 ..........14.7% $ 777,731,941 ............ $ 911,304,246 ........... 133,572,305 ............ 17.1% 130,000 ...........129,900........-100 .......... -0.1%February ..... 4,849 ........ 5,432 ......... 583 ..........12.0% $ 859,187,212 ............ $ 1,013,402,466 ........ 154,215,254 ............ 17.9% 127,000 ...........131,000........4,000 ........ 3.1%March ......... 6,827 ........ 7,437 ......... 610 ..........8.9% $ 1,100,011,643 ......... $ 1,412,236,023 ........ 312,224,380 ............ 28.3% 120,000 ...........135,700........15,700 ...... 13.1%April ........... 7,601 ........ 7,766 ......... 165 ..........2.2% $ 1,227,951,267 ......... $ 1,421,144,753 ........ 193,193,486 ............ 15.7% 117,500 ...........135,950........18,450 ...... 15.7%May ............ 8,161 ........ 7,662 ......... -499 ........-6.1% $ 1,367,855,390 ......... $ 1,443,694,329 ........ 75,838,939 .............. 5.5% 121,500 ...........137,900........16,400 ...... 13.5%June ........... 8,154 ........ 4,724 ......... -3,430 .....-42.1% $ 1,440,058,524 ......... $ 939,545,285 ........... -500,513,239 ........... -34.8% 130,000 ...........137,000........7,000 ........ 5.4%
Source: ARMLS. Information is deemed reliable but not guaranteed. Data maintained by ARMLS may not reflect all real estate activity in the market.
Housing Affordability IndexGreater Phoenix Area
69.5 49.3 26.6 33.2 65.3 83.6 81.9 2000 Q1 2005 Q2 2006 Q3 2007 Q3 2008 Q2 2009 Q2 2010 Q1
Source: NAHB Housing Opportunity Index
Experiencethedifference.Theconnectionbetweenyouandyouragentisvitalforcompleteunderstandingofwhatyouwantandhowtogetitforyou. WhenworkingwithMarie,youwillfeelasthoughyouareherONLYclient.Shepridesherselfonworkingone-on-onewithyouandwillattendtoyoureveryneedwithpersonalizedservice.“Imeasuremysuccessoneclientatthetime,”shestates. Todaymorethanever,buyersandsellersarerelyingonRealtorsthathaveproventhemselvesintheirindustry.Let’stalkaboutthemarket,yourhome,yourgoalsandhowwecanstrategizeandformulateaplanspecifictoyourpersonalcircumstances.Ilookforwardtoworkingwithyou!
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Marie HeilmanASSOCIATEBROKER
Phone: 480.570.5555 [email protected]
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Economic ForecastRain or Shine?
Local Housing Market Who’s Buying & What’s Selling
M E T R O P H O E N I X
Recession Recovery: Steady or Sporadic?
M I D - Y E A R U P D A T E
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January-June 2010 Sales Statistics By Community
January-June 2010 Average Sales Price By City
Community Average DaysOn List/Sell # SalesPrice Market PriceRatio Closed
Ancala ........................................$1,228,821 ................. 491 ..................91% ..........................16 Bellasera ........................................$532,944 ................. 145 ..................94% ...........................9Boulders .........................................$840,126 ................. 212 ..................92% ..........................17DC Ranch......................................$863,666 ................. 176 ..................91% ..........................63Desert Highlands .......................$1,266,000 ................. 349 ..................91% ..........................10Desert Mountain ........................$1,415,365 ................. 326 ..................86% ..........................59Eagle Mountain ............................$748,088 ................. 145 ..................93% ..........................17Estancia ......................................$1,049,140 ................. 165 ..................80% ..........................35FireRock ......................................$1,317,380 ................. 333 ..................87% ..........................21Gainey Ranch ..............................$887,750 ................. 234 ..................88% ..........................16Grayhawk .....................................$623,613 ................. 139 ..................94% ..........................57Hidden Hills ....................................$503,134 ................. 136 ..................94% ..........................21Ironwood Village ..........................$330,414 ................. 101 ..................96% ..........................29Legend Trail ...................................$482,903 ................. 114 ..................95% ..........................28McCormick Ranch .......................$397,025 ................. 139 ..................94% ..........................16McDowell Mountain Ranch ........$513,985 ................. 126 ..................96% .........................122Mirabel ..........................................$970,171 ................. 353 ..................83% ..........................22Scottsdale Mountain ...................$566,883 ................. 150 ..................94% ..........................31Scottsdale Ranch .........................$530,162 ................. 171 ..................92% ..........................38Sincuidados ..................................$715,250 ................. 190 ..................94% ..........................10Silverleaf .....................................$2,844,714 ................. 190 ..................92% ..........................18Stonegate .....................................$536,750 ................. 124 ..................93% ..........................23Terravita .........................................$467,832 ................. 127 ..................95% ..........................48Troon North ....................................$860,710 ................. 229 ..................91% ..........................38Troon Village .................................$712,694 ................. 106 ..................91% ..........................16Whisper Rock .............................$1,881,875 ................. 516 ..................89% ...........................8Winfield ..........................................$531,045 ................. 303 ..................90% ..........................11
Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.(Single-Family Residences)
Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.(Single-Family Residences)
Scottsdale:$552,027
Mesa:$166,238
Chandler:$223,088
Peoria:$182,312
Carefree:$769,102
CaveCreek:$369,248
LitchfieldPark:$206,415
ParadiseValley:$1,458,505
FountainHills:$519,651
Glendale:$133,694
Phoenix:$148,161
Gilbert:$212,772
Tempe:$210,123
PARADISE VALLEY ~ BILTMORE ~ ARCADIASCOTTSDALE ~ CAREFREE/CAVE CREEK