In June (The Market Has Two Bottoms) I reported that home sales are up in the Phoenix Metro Area. Fast forward to last month (September) and we see that the trend continues.
September marks the second best sales month for the year. One may conclude that the bottom has been reached with regard to quantity of real estate sales.
Homes sales are climbing, this time by double digits.
However, these numbers are being achieved at the expense of pricing- which continues to fall. Foreclosures and short sales continue to increase. To compete against this, new home builders are also continuing their efforts to stay competitive.
As reported by David Woodfill in the October 15, 2008 issue of the East Valley Tribune, "One of the upsides in the ASU report was that declining prices are attracting buyers, especially those in the lower income ranges. They're also drawing more investors who anticipate a rise in prices in the coming years."
Another report by Kerry Fehr-Snyder of the Arizona Republic reported that "Foreclosures continue to drag down median resale home prices". Foreclosures account for as few as 12% of Ahwatukee's September sales but as many as 41% of sales in Mesa. Since such properties are transacted at a much lower than average price, this affects the median home price. In other words, people are bargain shopping.
Though these are statistics, I can lend additional credence to the reports. Most of my recent closings are foreclosed homes or properties purchased via short sale.
Responding to the increase in bank owned properties, new home communities continue to sweeten the deal. They have continued to lower prices and make it easier for people to finance new homes. Most of them, however, have only so much room to negotiate. They are selling homes at prices that many would have found inconceivable during the hay-days of 2005.
If you're interested in purchasing a home, there may not be a better time. Prices are low and great loan programs exist to help make this process very smooth and affordable.
photo credit: "Money for Mortgage" by Svilen Mushkatov
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Chuck Willman is a real estate agent based in the Phoenix Metro area. You can contact him at 480.292.0600.
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Chuck this is a very good post for your local buyer. Our market is experiencing a frenzy of "distressed properties" activity (foreclosures, short sales, REO's). If an agent does not deal in those, he might as well exit the field of Real Estate...