After a long and painful period of decline, Phoenix’s real estate market is finally showing signs of life. Sure the big movers are foreclosures and that those who bought at the top have seen their property values drop nearly 50 percent. But the perpetual gloom that has hung over Phoenix, the poster child for the housing meltdown, seems to be over.
The market is developing some velocity with buyers and investors coming out of the woodwork. Buyers know that there still may be some minor declines in pricing, but overall the deals on housing are the best they will ever see again.
And the buyers are returning.
Phoenix’s housing bust has turned into a quasi-boom, a sign that its market may have hit bottom and a sneak preview of what a national housing recovery could look like.
More homes are selling than at any time since 2006. Prices are slowly stabilizing. Buyers are once again finding themselves in frantic bidding wars — only this time over foreclosed houses selling at deep discounts rather than ranch homes listing for vast sums.
“The free market is at work,” said Shannon Hubbard, a real estate agent and blogger here. “Prices got driven down so much that people said, ‘I’m going to come out and play.’ “
Home prices continue to plummet or tread water in much of the nation, but there have been tentative signs of life. Pending home sales rose 3.2% nationally in April, the second month of increases after a record low in January. Los Angeles Times.
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{ 7 comments… read them below or add one }
Yeah, nobody call for the bottom just yet. The spring uptick in sales does not necessarily mean that the trouble spots of the nation are going to bounce back.
Home sales are rising compared to January, but that happens every year. It isn’t a sign of the end but is really an annual given.
There are still a couple shoes to drop on housing. One, the ARM resets in 2010 and 2011 will put more pressure on foreclosures and price declines. Also, the Fed is clearly manipulating mortgage rates by printing money to buy mortgage backed securities. This will only last for a while. Eventually, the market penalizes price controls.
So things may not be as bad as last year, but we are far from the end.
Great points guys. I guess the point I was trying to get across is that the period of free fall is over. The bottom may be bumpy and stay down for a bit more, but the combination of low prices and shrinking inventory will allow consumers to feel secure making a purchase.
Hi I am an estate agent in Brisbane, Australia, I am finding there are quite a few Australians buying properties in the states at the moment. Do you think the market has hit rockbottom yet??
New Farm Real Estate
I've seen the supply of homes for sale in PHX drop for a few months now on ListingSupply.com and I really think the market has turned. Someone pointed out that the gov't has been printing money to manipulate prices. It is important to remember that printing money leads to severe inflation. Inflation pushes the prices of hard assets (like real estate, gold, commodities) UP. Also, Phoenix is still growing at an incredible rate. The 300 new people a day need somewhere to live.
As a Realtor in Phoenix, Arizona, I can report the market has continued to decline slightly since the First Time Buyer Tax credit expired at the end of May. I know, the tax credit has been extended for closings. I use the end of May because that was the deadline to open escrow. The market has remained soft. If the government does nothing things will rebound in time. If they decide to start a new program it will only have a temporary effect.
All real estate is a pendulum…although the market has declined, it will bounce back. Phoenix has been hit harder than most other major cities but in time, values will come to rise again.