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Did a Dead Cat Just Bounce? Or has Real Estate Finally Hit a Bottom???

By
Real Estate Broker/Owner

The local markets I serve, Litchfield Park, Goodyear, Avondale, Surprise and Glendale, Arizona (West Valley Phoenix) have been some of the hardest hit areas in the nation. Many of our local communities have witnessed price drops in excess of 50% from 2004-2008. I field calls almost daily from homeowners who purchased a property in 2004-2005 and who are now more than 200% upside down! Dealing with sellers in this market has been depressing and difficult, and like many of you I have been longing to feel good about my market again.

However, recently things have started to "seem" different. Maybe it's just me, or maybe it's just my local market, but the last 30 days has begun to "feel" like productive real estate activity is picking up. I can't exactly put my finger on why I feel this way, but there are a bunch of silly little things I've noticed recently like regularly running into other agents with their clients at listings, or the number of business cards left on coffee tables.

Sure, I could point to a lot of recent positive statistics about home resales, low interest rates, and government stimulus programs. Or I could discuss the fact that most bank owned homes receive multiple offers in a week, and how it's becoming more common to see sold prices in excess of list prices on CMAs. Those are tangible proof of a bottom, right?

But I could also point to the wave of foreclosures on the horizon, the continuing international financial crisis, rising unemployment, blighted communities abandoned by developers...yada, yada, yada. Or I could just post a video about a former Wall Street executive delivering pizzas or driving a cab. 

But whatever the numbers, my gut is telling me something has changed. I believe in the idea that demand for residential real estate ownership is relatively constant, and that affordability and population demographics are the biggest drivers of appreciation. So perhaps when I see school bus drivers and Wal Mart employees buying homes that senior executives could barely afford 3 years ago, it sparks my instincts? Or maybe I remember commuter cities in Southern California during the mid 1990's when similar signs pointed to a recovery in those markets that had been decimated?

Or could it be that I just want to believe so badly that things are getting better that I have exaggerated little positive signs into macro economic indicators?  

So which is it? Has the real estate market finally reached a bottom? Is it beginning to level off? Or am I crazy and we are still skiing down a steep slope?

Then again, maybe I should stop worrying about it and just get back to work. I have a multiple offer situation to deal with on a bank owned home that just came on the market yesterday...

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Comments(5)

Margaret Mitchell
Coldwell Banker Yorke Realty - York, ME
Seacoast Maine & NH Real Estate
I'm voting for a bounce on the bottom. It's great to hear about a multiple offer on a well priced offering!
Mar 24, 2009 07:08 AM
David Monsour
Keller Williams Keystone Realty - Gettysburg, PA
ABR - www.realty-insights.com
The media is starting to suggest that we are going to come out of this mess by fall as well. As much as hate the control they have, with the media goes consumer confidence. I tend to agree, many realtors I know are getting into the action mode, people are making calls, its feeling a little better. Perhaps a positive attitude will spread like (I can only think of things I'd never type publicly)....
Mar 24, 2009 07:12 AM
Mark Archer
Fathom Realty - Glendale, AZ
Realtor,
Hi James, I was just reading your post and I have the answer for you. You can turn every one of those calls you receive every day into a commission paid to you.... If this is of interest to you just give me a call at 623-444-4498 and I will explain how.
Mar 24, 2009 07:23 AM
Andrew Monaghan
The Monaghan Group - Glendale, AZ
CRS, GRI, EPro Associate Broker
Prices have been dropping over the past months, it seems like they cant go any lower but we will see, remember that inventory is dropping but Fannie, Freddie, Citi, Wells, BofA and Chase have not been foreclosing, they are all waiting to see what happens with the Obama plan. I was at a class where i was told Fannie started forwclosing for 2 weeks and picked up 14000 homes, take out weekends and thats 1200 per day, lets wait and see
Mar 30, 2009 05:55 PM
B.G. Davison
EquityLock Financial - Phoenix, AZ
With prices falling, there are unique ways available to get consumer confidence back in the housing sector. They are afraid to buy because they want to wait until "it hits bottom". Well its not going to hit bottom for some time, especially in certain neighborhoods. So many are approved for loans right now, but want to wait. Which is understandable. If you had the option of knowing that the price of your home dropping was no big deal, and that when you went to sell that home 5, 10, 15 years from now that you would get a check cut to you for the difference in property value, would you buy now? 90% of people say yes to that same question. Home Price Protection is the answer in today's skittish market. Contact me for questions, I'd love to show you how it works!
May 20, 2009 06:54 AM