While calculating absorption rates for the west valley active adult communities for a previous post I did, I decided to see how the Surprise family communities were fairing. I already knew the prices had plummeted, in some cases as low or lower than the prices paid as far back as 2003 and 2004.
I knew the real estate speculators had rolled through Surprise in droves and I knew the lenders had gotten far more creative in their lending practices than they should have. I also knew that a large percentage of the foreclosure and short sale homes here in Surprise were people who jumped into the investor market too late and had thought they could flip the homes for profit.
Knowing all this, and not having kept up with the market outside the walls of the active adult communities, I just assumed the absorption rate was probably over a years supply of homes. Last year I had calculated these figures for a family neighborhood in Peoria and had found they had an 18 month supply of homes. Since Surprise gets its share of local media coverage about the horrible state of real estate affairs you can see where my head was at.
Needless to say when I ran the numbers, I was shocked. Surprise is running at around a 5 month supply of homes. This would normally indicate a fairly healthy market, leaning towards being a sellers market. Now, do I think the market is good? NO! Over half the current listings are short sales and bank pre-foreclosures. But what it does tell me is, homes are moving. The short sale homes are being snapped up. Yes, it's killing the resale market for the homeowners with who would like to sell but don't want to lose their shorts in the process. But for the people who can afford to sit tight a little longer, I think once the pre-foreclosures are cleared out, our market out here COULD rebound a little quicker than some other locations.
I know it's not the best scenario and many probably think I'm looking through rose colored glasses, but I do feel it is a glimmer of hope. It will all hinge on how many more desperate homeowners there are who have to put their homes on the short sale market. Once the fire sale is over....
Kathy Anderson
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Kathy, I see light at the end of the tunnel every day from my perspective as a home inspector. We are seeing our inspection numbers increase. We are seeing higher volumes in the areas you speak of. Buyers are definately starting to get excited about the prospects of getting back out on the playing field. They have been sitting on the sidelines for far too long and human nature just wont let it go on for too much longer. Just like you said, most of the homes we inspect are bank owned or short sale, but I am starting to see an increase on good ole' fashion seller owned properties which is good sign that things are starting to swing the other direction. Lets hope it continues! Thanks for your update!
Alan Robinson - Peoria, AZ http://www.HouseProHomeInspections.com