Today’s Real Estate market has changed from the recent down turn (real estate prices valley wide declined from mid to late 2006 until mid to late 2011). Now, the real estate market is faced with low supply and high demand. According to Adam Smith’s Economic theory in this situation, prices will rise. The real estate market in Grayhawk, Scottsdale and Valley wide have all proven this to be true.
Prices have risen from the bottom made in the back half of 2011 and are currently up 20-30% or more depending on which community or city you live with the Phoenix Metro area. The fact is that prices are and have been moving up for the past 9-10 months. Let’s take a deeper look at how much supply is on the market and why supply is so low compared to what you hear in the media about this impending second wave of foreclosures that never materialized.In the Phoenix Metro (Maricopa County) area, population is 3.8 Million people and we currently have 9,887 available homes (condo, townhomes and homes) for sale. If you count all of the Homes in AZ MLS(Arizona Regional Mulitiple Listing Service, we have a total of 12,800, which includes homes outside of Maricopa County. We had more than 58,000 homes for sale in the fall of 2007. Last month, we sold 7,559 resale homes in Maricopa County (8500 in all of MLS) according to AZ MLS. That means currently we have less than 1.5 month’s supply of homes for sale (in a normal market, we average 3-5 month’s supply). The City of Scottsdale has 1,856 homes for sale and we sold 830 homes in May 2012, which means there is a less than 2.5 month’s supply for Scottsdale still below averages because Scottsdale averages more like 4-6 month’s supply in normal years. Grayhawk has 45 active listings and we sold 19 Grayhawk homes in May, 2012, so Grayhawk has fewer than 2.5 month’s supply.
The inventory of homes for sale in the Valley and Grayhawk has been in steep decline since the fall of 2010.
Yet this lack of supply is surprising people because the national media and real estate companies such as Realty Trac and Core Logic are stilling telling everyone that there tons of foreclosures coming. This may be true for other states with a judicial process for foreclosures but in Arizona, we do not involve the court system in our foreclosure process, so we have worked through the majority of Foreclosures that are going to happen. I am not saying we did not experience a huge dose already, with 210,000 foreclosures and over 65,000 Short Sales completed in the Valley, my point is just that the light at the end of the foreclosure tunnel is getting brighter and brighter.
A contributing factor why there are fewer foreclosures currently than just about everyone predicted, prices are rising significantly, bringing HOPE into the equation. The national media types were predicting that price recovery would take 7-10+ years to get back to an equity position and now it is looking like 2-5 years in many cases. Scottsdale prices are up 20% since the lowest recorded prices of the downturn were made in September 2011. We expect this upward trend to continue because of the continued low supply of homes for sale.
So what does that mean for the Real Estate market over the next 12-24 months? If you are a buyer, there are not a lot of homes to choose from on the market and if a good one comes on that is priced right it sells right away. Multiple offers the first day or weekend are common play again. I recently sold a home in Pinnacle at Grayhawk that was a regular sale (not a bank owned or short sale) that received multiple offers the first weekend and got the seller 9% more than that model sold previously only a few months before. Grayhawk prices are up more than 10% since the beginning of the year, which is at a pace of 2% a month. We do not see more inventory coming on the market until prices rise even further unlocking those underwater home owners that are anxious to change! To find out your homes’ value visit my website at www.HouseValuesInGrayhawk.com.
Thanks to The Cromford Report and ARMLS for the data in this Report.
Grayhawk Area Specialist
Realty One Group
Top 1% in Maricopa County