DID THE GILBERT AZ AND PHOENIX REAL ESTATE MARKET OVER CORRECT?

The Val Vista Lakes and Gilbert Homes AZ areas are affected about the same as the overall Phoenix market. The chart below is a Case Schiller Index chart for the Phoenix Metropolitan area, which includes the east valley town of Gilbert, plus Mesa, Chandler, Tempe and Scottsdale.

The chart draws a trend line from 1988, the dashed line ------ and the solid line is from 2001. That is a continuation of what would be considered the normal trend.

During 2005 the Phoenix market ballooned as the chart shows, to very high prices that were not sustainable. Bus loads of people from California would come and buy up property with little or no money down, expecting the prices to continue to increase.

So the spike shows the over reaction to the frenzy of buyers that drove prices up to around $225 per square foot in 2005. Gilbert Homes in AZ and in Val Vista Laks increased right along with the rest of the PHoenix area.

SALES DECREASE AND INVENTORY INCREASES

Then as the sales began to decrease and inventory began to increase, the supply finally became much greater than the demand so the prices suddenly dropped very rapidly catching those who had not watched the supply/demand/sales statistics, by surprise.

People became frightened, and those who would want to buy as the prices got back to the trend line were afraid to jump in.

So according to the Case Schiller trend line it would appear that the prices have over reacted on the down side and under shot the trend line.

INVESTORS TODAY

The investors of today who buy Gilbert Homes in AZ, Val Vista Lakes, or other communities in Gilbert are different types of investors. They must pay a minimum of 20% down, and in many cases they are paying cash. That means they are in the market for the long haul.

I believe they are looking 5 or more years down the road to when the prices get back up to the trend line, and possibly above it.

For more information on Buying or Selling Gilbert Homes AZ, Contact Captain Bill