January AZ Real Estate Market Report 2012 – What 2011 looked like and where do we go from here
December went our with a bang for 2 big reasons. We record a seasonally very high number of 7849 closings, which is the third highest december ever for the area covered by the AZMLS (all of Maricopa and some of Pinal counties). This is likely because lenders were trying to get as much distressed inventory in the 2011 count. Secondly, We finished the year mark APPRECIATION for the first time in 5 years.
Summation: 2011 will be know as the year the market turned for Phoenix Scottsdale Homes for Sale prices, as we saw prices
very strong in the fourth quarter due to low inventory(just for the record no economist, media talking head or newspaper reporting predicted this). The year finished with a flourish of low priced short sales moderating the gain to just under 1% for the year. The year felt like a another dissapointing one most because the media is still reporting declines not recognizing the recent uptick in prices recorded from the end of the third corner on. Today the AZ republic decided to start to just on the band wagon. I expect the rest of the media to catch on by the end of the first quarter as the market looks so strong they can’t keep denying it.
The biggest reason for the turn in the market, is the lack of supply of distressed and regular homes. Valley wide we listed about 27,000 less Phoenix Scottsdale homes for Sale than we did the previous 2 years and whopping 52,000 less homes than in 2006, which will be market as the top of the market. Experts predicted a flood of inventory, fortunately the opposite of what the masses predicted happened. Media states banks are holding back on more inventory still, but in AZ it is more of a recovery story and we are simply running out of homes headed for Phoenix Scottsdale foreclosure.
So what does the market look like for 2012 many ask? Well here is what the numbers are:
Inventory 18,523 – 2.2 months
AWC/Pending 16,215 – seasonally low but inline with last year
Closed in Dec 7,813 – 3rd Best December ever
These numbers are very similar to what 2004 finished. The following year we had 28% price appreciation based on average price(2005). I am not predicting 28% appreciation but do expect prices to climb valley wide by at lease 10% with definite upside. For those doubters, remember in 2004 we had loose lending standard but today we have 30% lower prices.