Real Estate News and Trends

Published in May 2008

A recent article from the Wall Street Journal proclaimed  THE HOUSING CRISIS IS OVER.  The writer believes that April 2008 will mark the bottom of the U.S. housing market.

 We’re not sure everything the writer says is applicable in        Phoenix, but we recently have seen positive trends in the  number of sales and the inventory of homes for sale.

 The number of sales each month continues to increase from a low of 2,866 in January.  In February sales were 3,392 and March was up to 4,252.  April witnessed a total of 4,786 homes sold, a 66% increase since January.

 The inventory of homes for sale continues to decrease which is great news for home sellers.  There are currently 54,734 homes for sale.  This is down from a high around 57,500 in September of last year. 

 We should have a balanced market when we reach 35,000  to 40,000 homes for sale in the Phoenix area.  As you can see we are still a ways from reaching this number, but the recent trends raise hope of a light at the end of the tunnel.

 Lower priced homes are selling.   The under $350,000 market comprises an increasingly large share of the total number of homes sold.   We think this segment of the Phoenix market will recover more quickly than more expensive homes.  Here is a breakout of homes recently sold and currently for sale:

 Current inventory of homes for sale:

· # of homes for sale under $350,000 = 65%

· # of homes for sale over $350,000 = 35%

March and April home sales:

· # of homes under $350,000 =80% - up from 70% in 07

· # of homes over $350,000 =20% - down from 30% in 07

 Nearly half of recent sales are short sales or foreclosures.   Banks are making deals to get bad loans off their books.  Many local homeowners who are upside down on their homes are simply giving their keys back to the bank.  This trend will continue through the year as many homeowners have adjustable rate loans that will reset at a higher level this year.  Many will not be able to afford to stay in their home, and will be forced into a short sale or foreclosure.

 The Federal Housing Administration (FHA) recently raised its loan limits.  Those vary from place to place, but in the Phoenix area it is now just under $350,000.  In uncertain times, lenders take more comfort from FHA loans since this government agency insures those loans.  These new loan  limits should further bolster the under $350,000 market.   Additionally, many homeowners will be able to save money by refinancing their current mortgage into a lower rate FHA loan.

 Every market has opportunities.  Knowing what they are and where to find them is an exciting and challenging endeavor.  Now more than ever you need informed and trusted advice from a professional to help you make the right decisions when it comes to buying or selling a home. 

 Please feel free to contact us whenever you, a family member or a friend has a real estate need.