Phoenix Real Estate Market is Booming: Multiple Offers within Days, Shortage of Houses for Buyers
From the Arizona Republic:
"Home prices are surging in metro Phoenix, climbing 8 percent in March alone and 20 percent in the past 12 months. The median price of a house in the region climbed to $134,900, according to a new report from the W. P. Carey School of Business at Arizona State University.
Mike Orr, Director of the Center for Real Estate Theory at ASU, doesn't expect home prices to continue to climb as fast as they did in March over the next few months. But he projects metro Phoenix's housing appreciation for 2012 to reach 25 percent by September. Orr credits the turnaround to steep drops in foreclosures and in the number of homes for sale, coupled with an increase in sales.
Fewer foreclosures means fewer inexpensive homes for buyers. The number of homes taken back by lenders in metro Phoenix is down 60 percent from March 2011. Housing inventory has dropped steadily during the past year because of a record number of investors snapping up properties out of foreclosure. Home sales are up 35 percent from a year ago as more regular buyers have joined investors in the mix.
"Prices have begun to rise at a fast pace, and bargains are no longer plentiful," Orr said. "Most homes that are priced well are attracting multiple offers within a couple of days, and many are exceeding the asking price."
March's price increase was the sixth in a row for Phoenix's housing market. Most real-estate analysts say the streak of rising home prices, along with slower foreclosures, is proof a housing recovery is under way. A growing number of national real-estate analysts say metro Phoenix is leading the U.S.' housing market's recovery.
Foreclosures are down, and so are the sales of lender-owned homes. Since March 2012, the number of foreclosures resold by lenders has plummeted 61 percent. At the same time, regular sales, new-home sales, investor purchases and short sales have climbed. All those types of transactions have higher median prices.
The number of houses on the market across the Phoenix area is down 64 percent from March 2011. Frustrated real-estate agents have buyers ready to sign contracts but can't find houses for them."
HT: Paul
"Home prices are surging in metro Phoenix, climbing 8 percent in March alone and 20 percent in the past 12 months. The median price of a house in the region climbed to $134,900, according to a new report from the W. P. Carey School of Business at Arizona State University.
Mike Orr, Director of the Center for Real Estate Theory at ASU, doesn't expect home prices to continue to climb as fast as they did in March over the next few months. But he projects metro Phoenix's housing appreciation for 2012 to reach 25 percent by September. Orr credits the turnaround to steep drops in foreclosures and in the number of homes for sale, coupled with an increase in sales.
Fewer foreclosures means fewer inexpensive homes for buyers. The number of homes taken back by lenders in metro Phoenix is down 60 percent from March 2011. Housing inventory has dropped steadily during the past year because of a record number of investors snapping up properties out of foreclosure. Home sales are up 35 percent from a year ago as more regular buyers have joined investors in the mix.
"Prices have begun to rise at a fast pace, and bargains are no longer plentiful," Orr said. "Most homes that are priced well are attracting multiple offers within a couple of days, and many are exceeding the asking price."
March's price increase was the sixth in a row for Phoenix's housing market. Most real-estate analysts say the streak of rising home prices, along with slower foreclosures, is proof a housing recovery is under way. A growing number of national real-estate analysts say metro Phoenix is leading the U.S.' housing market's recovery.
Foreclosures are down, and so are the sales of lender-owned homes. Since March 2012, the number of foreclosures resold by lenders has plummeted 61 percent. At the same time, regular sales, new-home sales, investor purchases and short sales have climbed. All those types of transactions have higher median prices.
The number of houses on the market across the Phoenix area is down 64 percent from March 2011. Frustrated real-estate agents have buyers ready to sign contracts but can't find houses for them."
HT: Paul
9 Comments:
Perspective
....On the other hand, only three metros—Miami, Phoenix and San Diego, all located in the four traditional "sand states" that just two years ago accounted for more than half of all foreclosures—were the only to register positive monthly returns over January.
The only thing that worries me is what's going to happen when the Fed starts to raise interest rates again as it had to in 2005, popping the housing bubble.
It's all good news, but I'd feel better about it if we the Fed weren't making money so unnaturally cheap again.
Methinks: It is Fed's mandate to increase liquidity during times of slow GDP growth. It is just doing what it's supposed to. I think a more pressing concern is the continued existence of the government's hand in the mortgage (and other) markets.
Abir, I agree with you about government's involvement in markets. However, I see no reason why the market couldn't set interest rates as well. In fact, it can and the Fed just manipulates them.
The Fed makes money cheap in the hopes of spurring investment evenly in the economy. Unfortunately (I guess), it has no control over how the money is spent or invested. Thus, the probability of bubbles big and small is increased by the Fed's activities.
Basically, I'm no less concerned about government central planning attempts in money than I am in the any other market.
This time around many of the sales are going to landlords that have been waiting for properties that can cash flow. I don't see the subprime bubble repeat, since many subprime borrowers can't even get a house. They just rent now.
Interesting interview with Bernanke
One thing we are seeing, which is fascinating, is housing growth is exploding in the West (up 20.6% Y-o-y), whereas the rest of the nation is more mild.
A quick break down of the regions as defined by the Census:
NorthEast: down 3.8%
South: Up 8.6%
Midwest: Up 9.0%
West: 20.6%
It should be noted that that cast majority of these housing starts are for multi-family units, but this is still a good thing.
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I heard a rumor that the dumb investor money is going into single family homes now. These people don't realize that being a landlord is a tricky business and far from a sure thing. But it is the latest fad for the near rich with money to invest.
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