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Housing market shows positive signs.

By
Real Estate Agent with Essential Properties, Inc

 

While there are still a large number of distressed homes on the market in Arizona, the number of those that reach foreclosure are on the decline.

Those statistics, coupled with the fact that the average selling price has been on the rise for six months straight, may be indicators that the local housing market is coming out of its downward spiral.

"I think we are coming out of it," said Chris Heagerty, director of communications for the Arizona Regional Multiple Listing Service. "The pace is a little frustrating because it is slow, but it's steady."

Heagerty has worked in the real estate business for 37 years and in Arizona since 2005.

"I saw the run up and definitely the run down," she said.

On Heagerty's watch, the average price of a home in Arizona was $350,000 in May 2007. It "hit rock bottom" in August 2011 at $151,000, she said. It has risen to $189,000 as of April 2012.

"It's a whole different world now than it was last year at this time," said Harold Poirier, branch manager for Coldwell Banker's Goodyear branch. "For homes selling for $250,000 or less, there is a tremendous amount of activity."

In fact, homes in that price range are reminding Poirier of Arizona's heyday.

"If you put a home on the market today, you'll have multiple offers at your price point or higher by noon tomorrow," he said. "It's the best it has been [since 2005]. We have more stuff going on than we know what to do with."

"At the low end it's a very dominant investor market," Heagerty said. "They are flying off the shelves. As you move up the chain, there are less investors and more homeowners."

The fact that people are buying homes, no matter who they are, reduces the supply, which in turn puts the rest in higher demand, which is a factor in prices going up.

"At one point, we had 14 to 15 months of inventory on the market," said Poirier, who has been working in the West Valley real estate market for 27 years. "Now it is at two months."

"We have six months under our belt of steady price increases," Heagerty said. "Unless something drastic happens, we are not anticipating that to stop."

The six-month trend of monthly price increases has sent the average price of a home in Arizona up 20 percent. Although that may not seem like much considering the market fell 60 percent, "it's in the right direction," Heagerty said.


Foreclosures down
Another part of the industry going in the right direction is the number of homes that reach foreclosure.

"There is a shifting percentage for how many are short sale compared to foreclosure," Heagerty said. "That shift is a positive sign for communities because short sales, most of the time, has the owner living in the home and taking care of it. With foreclosures, they are vacant and look rundown because no one is taking care of it."

Both short sales and foreclosures happen when the property is classified as a distressed home, which means the owner is behind on payments to the bank.

When the market first started to crash, banks were willing to foreclose on the property as opposed to allowing a short sale. They have since switched their stance, Poirier said.

"REOs (Real Estate Owned, which is the category of a home after it is foreclosed on) are almost nonexistent now," he said. "Short sales are becoming excessively popular."

Besides the banks' willingness to go the short-sale route, Poirier also credits "a lot of federal programs now available to help bail out homeowners" for the turnaround, he said.

However, by no means does this mean distressed properties will soon be a thing of the past, especially in the West Valley, Heagerty said.

"[The West Valley] has more than their fair share of distressed properties," she said. "That is a phenomenon you're going to see in the outlying areas."

The reason being, back when everyone was bit by the buy-a-house bug, prospective buyers would keep driving farther from central Phoenix until they reached a price point they could afford. So the outlying areas had a lot of first-time home buyers who paid more than the home was truly worth....


To read more please go to: http://www.westvalleyview.com/main.asp?SectionID=2&SubSectionID=186&ArticleID=42309

 

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Becky Garcia short sale specialist

YOUR AZ REALTOR SHORT SALE & REO SPECIALIST

 

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