So many of us have seen the value of our homes plummet, only to wait and wonder if they will ever recover. If you are a homeowner, we have some positive news to share with you, home prices in the Valley are on the rise.
In an article published in the New York Times, prices for existing homes here and in the surrounding areas have climbed by 25 percent during the 12 month period which ended in April. The increase in Phoenix-area home prices has far outpaced the rise in home values around the nation, where the median price of existing single-family homes rose 10.1 percent, according to the National Association of Realtors' most recent statistics. It was also higher than the surge in home prices in the Western region, which at 16 percent, was the most robust gain among all regions in the United States.
Median sales prices were 32 percent higher in May compared with a year ago, reported the W.P. Carey School of Business at Arizona State University. Another good sign-prices have not fallen since September.
Only in areas that were least affected by foreclosures during the recession, like upscale Cave Creek and Fountain Hills, are still seeing some decline in prices.
The rise in prices may be driven less by a resurgence in the local economy, but more due to a growing shortage of units for sale, as well as a steep decline of bank-owned bargains hitting the market. The number of homes for sale dropped to an unusually low 8,550 on June 1. That is down by 50 percent in just one year. In the Phoenix area alone, the number of distressed homes on the market fell by 81 percent in the year ended April 1, and the number of foreclosures fell by 62 percent.
The limited supply has led to bidding wars and sellers being flooded with offers. Something that we have not heard of in quite a long time. Just recently, a single-family home in Mesa was under contract in one day, having received multiple offers above the asking price. The three bedroom and two bath home had just undergone cosmetic repairs such as fresh paint and new tile. Making a few changes or refreshing your home can reap great rewards. A Chandler home garnered 84 offers, while a Glendale home had 95-only to sell for 17 percent higher than the listed price.
A foreclosed house in a Valley suburb bought for $225,000 in 2006 and listed by the bank for $57,420 last month, received 84 offers. The bank actually stopped accepting offers, and the sale in now pending.
Keep in mind that homes don't have to have all the bells and whistles. If they are priced right, and they're in a nice neighborhood (don't forget the all-important curb appeal) they can sell in the first few days, possibly within hours.
New home construction shot up 57 percent as homebuilders are responding to the low inventory. Builders are targeting first-time homebuyers and expanding families who are trying to enter the market before prices get too high for them.
The East Valley remained the hottest portion of the market for new homes. Gilbert held the record with 187 houses, followed by Chandler's 49 and Mesa'a 49. Phoenix logged 60 new homes in May.
Some builders, however, have temporarily closed their sales offices because they are not able to build enough homes to fulfill the demand. Others have been rushing to buy land.
One of the state's most prolific builders, Marcay Homes, bought 13 parcels of land for development over the last 30 months in Phoenix and Tucson. As of June 1, they had sold as many homes-242-as it did in all of last year. Over all, builders have on average a two-and-a-half month supply of new homes in their subdivisions.
With summer here, we may see the recent trend of climbing prices level off, as folks may be less inclined to move during the high temperatures. But, certainly, there is a trajectory of recovery taking place-and we couldn't be more delighted to see it.
Purchase your new home today. With record low mortgage rates and reasonable home prices, now is the best time to buy. Whether it is your first home, a move up or a move down, or an investment, do not miss out on this opportunity.
Contact me, Ruth Bassignan, and let me help you with the purchase of your new home.
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