Phoenix Real Estate Prices are Increasing

NEW INVENTORY

New inventory declined 3.3% to 9,176 new listings in April. This is the eighth month out of the last twelve recording declines. While declines in new inventory at the Phoenix real estate market wide level have reduced the supply side of the market balance equation, continuing reductions, notably at lower price points, is contributing to an undersupply of inventory and exerting upward pressure on pricing.

TOTAL INVENTORY

Total Active inventory continued its downward trend in April to land at 12,932. Low active listings available for sale exert upward pressure on pricing.

MONTHS SUPPLY OF INVENTORY (MSI)

MSI remained relatively stable in April at 2.5 months. Market wide MSI is tracked only as a barometer of overall market health..

SALES PRICES

Both April’s sales price metrics continued on the upward pricing trend line begun in November of last year. Median and average sales prices reacted to the upward pricing pressure exerted by lower inventories. In April, the median sales price climbed 6.2% to $138,000. The average sales price also rose by 4.8% to land at $189,000.

FORECLOSURES PENDING

Phoenix and Scottsdale Foreclosures pending ticked up by 27 units to 18,056 in April, the fourth month in a row of the recently flattened foreclosures pending trend line. Foreclosures pending represent property at some stage in the foreclosure process before the property is acquired by the lender. The Valley’s foreclosures pending reached their monthly high of 50,568 in November 2009. Overall, even with the recent flattening, the trend line since that high has been downward with very little deviation.

DISTRESSED SALES

Distressed sales, a composite of foreclosures and short sales, continued in April to decline as a percent of overall sales. Once as high as 74% of total sales, distressed sales (3,711) fell 2.8% compared to March to land at 44% of total sales. In addition, April continued the trend begun in December of dominance of short sales over foreclosures. The reversal represents a growing lender preference for work out through short sale over taking a property back through foreclosure.

AVERAGE DAYS ON MARKET (DOM)

Average days on market (DOM) dropped by 6 days to 86 in April. The decline in days on market over the last twelve months from 106 to the current 86 represents a brisk market overall, but is not indicative of DOM in smaller market niches. STAT recorded the highest DOM of 138 in February 2008.

CONCLUSION

Michael Orr with the W.P. Carey School of Business at ASU believes the market recovery is well under way.

“Prices have begun to rise at a fast pace, and bargains are no longer plentiful,” says Orr. “Most homes that are priced well are attracting multiple offers within a couple of days, and many are exceeding the asking price.”

Orr emphasizes there’s been a dramatic change in the types of transactions happening in the market. Normal resales, new home sales, investor flips and short sales are on the rise, while lender owned homes are down 61% from a year ago.

Orr estimates there is only a 23 day supply of homes priced under $250,000 and the market is heavily unbalanced with more buyers than sellers.

When it comes to resales, Orr says all-cash buyers are still receiving preference over financed offers. That’s because lender’s need an appraisal, and appraisers are typically looking at months-old home sales for comparison. Those are priced well below the current market value.

“This puts ordinary home buyers at a severe disadvantage,” explains Orr. “More than 26% of Phoenix-area transactions are investor purchases.”

The upward pricing pressure exerted by dwindling inventory at the lower end, drives potential Buyers to the next higher price point. Even with decreased inventory at the low end of the pricing spectrum, the Valley’s housing affordability is still desirable and fueling high demand, as seen in robust sales figures.

Data gathered by the Arizona Regional Multiple Listing Service (ARMLS) and The W.P. Carey School of Business

For more information please go to www.SouthScottsdaleHomes.com

****** ARE YOU CONSIDERING SHORT SELLING YOUR HOME?*******

SHORT SALE TAX FORGIVENESS ACT EXPIRES IN 2012

IF YOU ARE CONSIDERING SHORT SELLING ***NOW*** IS THE TIME TO BEAT THE DEADLINE!

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--- $3,000 cash credit at closing

--- Automatic release of any deficiency judgment

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Did you short sale your home? 

Or lose it to foreclosure? 

Do you want to buy right away and take advantage of prices before they go up? 

Heard that you won’t qualify for at least a few years?

Well, there is a new loan program that may be exactly what you are looking for!

-      Allows someone to purchase again ONE DAY after a short sale or foreclosure

-      No waiting 2-3 years after a short sale or 5-7 years after a foreclosure

-      Competitive interest rates well below hard money loans which was the only previous option

-      Rest of credit history must be relatively clear, the short sale or foreclosure must have been strategic versus true hardship or forced

-      Financing provided for down to a 600 credit score

-      Requires 30% down payment

-      Various loan terms depending on needs

-      Some outlying Phoenix homes are restricted

Don’t want to wait the required FNMA (Fannie Mae) and FHA waiting periods for short sales and foreclosures before purchasing another home?  But don’t want to pay cash or private money double digit interest rates?  There is now a unique loan product now available for consumers who had a recent strategic short sale or foreclosure without paying double digit rates! If you have experienced a recent short sale or foreclosure, but the rest of your credit profile shows a pretty clean history over the past 24 months, this new, innovative loan product may be for you.   

Peoples Mortgage is pleased to announce a very unique loan product to the AZ market.   We can offer clients financing who are ONE DAY out of a short sale or foreclosure.  FNMA and FHA waiting periods do not apply because this strategic short sale product was developed as a portfolio loan that we will underwrite and service ourselves.  Rates and down payment are much more attractive than private money out on the street.   It isn’t for everyone that has had a recent short sale or foreclosure, but it is definitely for that buyer that has good credit other than the short sale or foreclosure event (strategically left their home and looking to buy again to take advantage of lower home prices).  Financing even allowed down to a 600 credit score!

This product is a hybrid ARM fixed for 3,5, or 7 years depending on how long the buyer needs it.   For example, if the buyer had a strategic short sale, they don’t need 7 years – the 3 year ARM will get them to FNMA guidelines of 2 years after a short sale so they could refinance in to regular FNMA type financing.  If they had a foreclosure, then the 5 year or 7 year might make more sense if their loan amount is above FHA limits and they would have to wait 7 years to refinance in to conventional financing for FNMA.  

The rate will depend on credit score, loan to value, etc… but in the 7-8% range. Minimum down payment requirement is 30%. There are some market restrictions as far as areas, (not accepting properties in Maricopa, Queen Creek, etc…)

___________________________________________________

Phoenix Area Real Estate Market Recovery Continuing

Good for Sellers, Not so Great for Buyers

TAKE AWAYS (read full article below for more info)

- Sales increased 22.3% from February to March

- March sales were at 8,869 compared to decade low 2,912 in January 2008

- New listings are following an upward trend since January

- Total inventory is down from 56,227 in November 2009 to 21.863 in March

- Month’s supply was 2.47 months in March, the lowest since September 2005

- Median list price rose 3.5% in March

- Median sales price has climbed 19.9% since the low in May 2011

- Average sales price is up 8.4%

- Pending foreclosures continue to fall

- Distressed sales fell to under 50% of the sales

- Average Days on Market fell to 92 days

- We are in the midst of a recovery however there are some challenges that will still have an effect on the market recovery.

SALES Month over Month

Total sales in March increased by 1,620 sales (22.3%) to land at 8,869. This continues the upward sales trend that began in January.

SALES Year over Year

March sales of 8,869 fell 10.7% below the March 2011 figure. However, it is slightly above the 12 month average of 8,453. High sales figures, a consequence of the Valley’s strong affordability, contrast sharply with the decade record low sales figure of 2,912 sales in January 2008.

NEW INVENTORY

New inventory rose slightly (6.8%) in March to 9,492. New listings, which had been on a downward trend line since April 2011, reversed direction in January and have been following an upward trend since then.

TOTAL INVENTORY

Total inventory, which began a decline from 56,227 in November 2009, continued to fall in March by 7.9%, to 21,863. The reduction in total inventory to this level is reminiscent of inventory numbers in 2003 and 2004, the Valley’s last normal market.

MONTHS SUPPLY OF INVENTORY (MSI)

Market wide month’s supply of inventory (MSI) fell to 2.47 months in March, the lowest level since September 2005. While the market wide MSI is not indicative of inventory supply in smaller market niches, it does signal declining inventory and upward market pressure on pricing.

NEW LIST PRICES

New list pricing continued upward in March. The median new list price rose 3.5% to $149,900. The last time the median new list price hit the $149,000 mark was in May of 2009, when pricing was still in free fall. The average new list price rose 1.4% to $232,900, continuing the positive pricing momentum started in August.

SALES PRICES

After remaining relatively flat for the first eight months of 2011, median sales pricing began a slow and steady rise in September 2011, which continued in March to land at $129,900. The median sales price climbed 19.9% from the decade low of $108,300 in May 2011. The average sales price rose 8.4% in March to $180,600. The last time average sales price was $180,000 was in January 2009, while pricing was declining.

Median sales price hit its decade high of $264,800 in June 2006 to tumble 59.1% to its low of $108,300 in May 2011. Average sales price fell 56.8% from its decade high of $350,400 in May 2007 to $151,368 in August 2011. The upward pricing we have seen over the last months is welcome, but should be seen only as the first steps in the right direction of a long climb.

FORECLOSURES PENDING

Foreclosures pending in March increased by 196 units to end at 18,029. Foreclosures pending remain on the steady downward trend line, begun from a high of 50,568 per month in November 2009. Foreclosures pending are the precursors to lender owned inventory and sales. Steady declines in properties are good news for the Valley’s pricing recovery. This is the third month in a row foreclosures pending has hovered around 18,000. Prior to January, this level was last seen in second quarter of 2008.

Residential Foreclosures were at their all-time high in March 2010 at 5,451. Residential foreclosures were 1,982 last month. This was down by 123 units from February.

DISTRESSED SALES

Distressed sales as a percentage of total sales fell 4.6% in March, to 46.8%. This is the first time since ARMLS began tracking this metric that it dipped below 50%. Distressed properties have unduly influenced Valley pricing for some time. In September of 2010, its percentage reached an all-time high of 74.1% of total sales.

In March, there were 2,275 short sales closed compared to 1,872 lender owned sales. In the past foreclosures dominated short sales, but in November 2011, the trend reversed, and short sales have eclipsed lender owned since. This possibly reflects greater lender appetite for workout over foreclosure.

The residential REO properties are sitting at 7,408 vs. last month of 7,909. Down 501 units from last month. March of 2011 there were 19,681 REO properties, down 60%. Listed REO properties are approximately 1,458 units and pending are 2,125. That tells us that there are approximately 3,825 properties that are foreclosed but not yet on the market.

AVERAGE DAYS ON MARKET (DOM)

Average Days on Market dropped another day in March to 92. This metric fell below 100 in September, and has remained in the 92-95 day range since then. Market wide DOM is not reflective of DOM in smaller markets, which are influenced by the supply and demand of that specific market niche. DOM as reported in STAT is a barometer of overall market health. STAT recorded its highest DOM of 138 in February 2008.

COMMENTARY

March STAT reports a continuation of good news seen over the last several months. A 7.9% decline in inventory to 21,863, coupled with a 22.3% rise in sales to 8,869, exerts positive pressure on pricing. Once again STAT reports gains in all four pricing metrics: median and average prices, for both listing and sales. The upward pricing trend that began in the August/September time frame continues. Although not robust, it is steady and definitely upward.

MSI dropped to 2.47 in March, which makes for a brisk market, fueling complaints over lack of adequate inventory. The current forces of supply and demand should support this upward pricing trend. Valley pricing fell approximately 60% between June 2006 and the Q2/Q3 2011, leaving much ground to be made up. Many doubt that the high average of $350,400 or the high median of $264,800 will be matched in this recovery.

At the Scottsdale Area Association of REALTORS® Economic Forecast on April 2, NAR Chief Economist Lawrence Yun reported on the recovery and forecasted some trends and concerns for the Phoenix real estate market, Arizona and the nation. While the Valley has record affordability and historically low interest rates, other factors are impeding recovery.

As the Valley watches inventory dwindle, particularly worrisome, according to Dr. Yun, is that builders are not restocking to keep up with the US population growth of 3 million per year. Some areas are seeing shortages already. Large builders have been able to tap their stock holdings to get the necessary capital to build, but other medium to small builders are stuck without access to funding.

While mortgage interest rates are historically very low, many homebuyers are still denied credit. Banks have tightened their lending standards, keeping many buyers out of the market. The FNMA average credit score is 720, and the FHA average score is 650. Consumers with credit scores of 720-760 represent only 20% of the population. If lending standards were set back to the year 2,000, Dr. Yun believes that sales could be 15-20% higher than they are today.

Banks, though profitable, have not seen their stocks rise. Investors are staying away from bank stocks, fearing the negative effects of lawsuits. There has been only partial implementation of the Dodd-Frank legislation, which has left banks and investors uncertain of the implications of full implementation. This further encourages them to hoard cash, and hold firm on restrictive lending standards.

Arizona, California, Florida and Nevada, where job losses were the most severe, are now leading U.S. job expansion. Arizona posted a 40,600 job growth year over year through February. From August through December, the four above states added 222,100 jobs, 28% of the U.S. increase in employment, according to Labor Department figures. While unemployment for Phoenix is 8.3%, greater Phoenix job growth increased by 37,800 jobs (1.6%) from a year ago, according to Economist Elliott Pollach’s March 12 publication.

While important indicators are moving in the right direction, and there are many positive metrics in March STAT, there are still hurdles and issues to overcome. As STAT has said in months past, this recovery is steady as she goes.

Data gathered by the Arizona Regional Multiple Listing Service (ARMLS) and The Cromford Report

For more information please go to www.SouthScottsdaleHomes.com

Featured Article

AZ Week: 'Worst is Over' in Housing Crunch

The decline in Phoenix home values and the lethargic housing market are coming to an end in Phoenix, and where Phoenix goes, the rest of Arizona will follow, says an Arizona State University real estate expert.

"In greater Phoenix, the worst is definitely over," said Michael Orr, director of the Center for Real Estate Theory and Practice at ASU's W.P. Carey School of Business. " ... Most of the signals I look at are looking up."

Orr, who tracks real estate data for the Phoenix metro area including Maricopa and Pinal counties, said in an interview for Friday's Arizona Week that the Tucson real estate market usually follows Phoenix trends by up to 12 months. The two metro areas take in nearly 90 percent of the state's housing market.

Orr said prices are beginning to rise as housing inventory falls, and that is leading some builders to become active again. But he said demand will outstrip supply for a while.

"Each week that goes by, we're seeing less and less homes available, so anybody who's in the market to buy is getting more frustrated and more desperate, and that tends to mean they'll bid higher prices against their competition," he said.

At the same time, Arizona foreclosures remain above the national average. RealtyTrac, an Irvine, Calif., company that follows national foreclosure trends and markets foreclosed properties, reported that in February, Arizona had 9,131 foreclosures, up 4.4 percent from January.

The number was 41 percent below what it was in February 2011 for the state, and Orr said the year-to-year number is the one to watch. He said his own data on foreclosures is more conservative than RealtyTrac's, but he noted a similar year-to-year decline in the state.

"The good news is that we're seeing a continued downward trend in foreclosure activity in Arizona," RealtyTrac Vice President Daren Blomquist said in an Arizona Week interview. " ... This was a continuation of a trend we've been seeing for a long time. In Phoenix, 15 out of the last 16 months, we've seen decreasing foreclosure activity."

At the same time, Blomquist said, the numbers in Arizona were still third highest in the country, and Phoenix still ranked 14th worst among major metropolitan areas for foreclosures.

Despite that, Orr said the state's housing market has shifted in the last few months, and unlike others, he sees recovery coming.

"People are saying we need to get used to the market being this low and it'll stay low," Orr said. "I don't think that's going to happen. We're going to have something of a snap back. And, given the very low supply (of houses for sale) we currently have, it's going to be a feeding frenzy for quite some time."

Prices are rising, in some cases as much as 5 percent a month, he said. Still, because at the bottom of the market they had fallen by 58 percent, there is a long ways to go to get back to normal.

Even with rising prices, home ownership is a relative bargain, both in home costs and mortgage lending rates, said David Godlewski, president of the Southern Arizona Home Builders Association. In an Arizona Week interview, he said it is a good time to buy.

By: Michael Chihak

www.azpm.org

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Fun Facts & Tips

April Fools' Day Fun Facts

While the origins of April Fools' Day are sketchy at best, one of the more popular theories dates back to the 16th century. Prior to 1582, the new year began on April 1. When the new year was moved to Jan. 1 in 1582, there were some people who hadn't heard or didn't believe the change in the date, so they continued to celebrate New Year's Day on April 1. These "April fools" were often ridiculed by being sent on "fools errands" or were made the butt of other practical jokes.

Below are some other fun and interesting April Fools' Day facts:

• The Scottish love April Fools' Day. In fact they love it so much, they celebrate it for two days. In Scotland they call it "hunting the gowk" (the cuckoo), and if you are tricked, you are an "April gowk." To really get "behind" (pun!) the holiday,  the second day, called "Taily Day," is devoted to pranks involving the back side of the body. The "butt" of these jokes may often have a "kick me" sign placed on their back.
• There's something fishy going on in France. Kids fool their friends by taping a paper fish to their backs. When the victim discovers the fish, the prankster yells "Poisson d'Avril!" (April Fish!)
• In Portugal, April Fools' Day is actually celebrated on the Sunday and Monday before Lent.  The big trick there? Throwing flour at your friend's face.
• In Poland everyone takes part in April Fools' Day activities, including the media and sometimes public institutions. All serious activities are completely avoided for the day. A favorite joke? Pouring water on people.
• According to this CareerBuilder.com survey, 32 percent of workers say they have either initiated or been on the receiving end of an April Fools’ Day prank at work.
• In certain areas of Belgium, children lock out their parents or teachers and only let them in if they promise to give them sweets.
• Depending on where you live in England, instead of a "fool" you could be called a "noodle," "noddy," "gobby" or "gob."
• April Fools' Day goes beyond just switching out the sugar bowl with salt.  Check out this list of the Top 100 April Fools' Day Hoaxes. They include the Swiss Spaghetti Harvest , the baseball pitching phenom Sidd Finch and the Left-Handed Whopper.
• Mark Twain appeared to be  a big fan of "fools." Some of his pinings on fools include:

"It's better to keep your mouth shut and be thought a fool than to open it and leave no doubt.

Let us be thankful for the fools. But for them the rest of us could not succeed.

The first of April is the day we remember what we are the other 364 days of the year."

Brought to you by www.woodridgepatch.com

What’s Happening Around Town This Month

Music, Festivals and Much More Fun!

El Dia de los Ninos
Booths with interactive games, hands-on art activities, a reading village, live entertainment, giveaways and thousands of participants from across the valley and state. Sponsored by the Latino Institute. 9 a.m. to 1 p.m. Margaret T. Hance Park. Free.
In 2012: April 27

El Tour de Mesa
All age and experience levels participate in bicycle rides routed throughout Mesa beginning at Red Mountain Park. Routes extend into the Salt River Recreation Area and Tonto National Forest.
In 2012: April 14

Fiesta days Rodeo in Cave Creek
Golf tournament, dance, parade, three-performance PRCA rodeo and related events. Entertainment for cowboys and cowgirls of all ages.
In 2012: March 28 - April 1

Fiesta Mall Entertainment
Mariachis, magicians, dancers, bands -- several entertainers each Saturday and Sunday afternoon at Center Court at Fiesta Mall in Mesa. Family friendly. Free.
In 2012: Every Saturday and Sunday

First Friday
Visit more than 100 downtown Phoenix art galleries, studios and art spaces. Free.
In 2012: First Friday of the month

Carefree Sundays at el Pegregal
Free musical entertainment from 1 p.m. to 4 p.m. There is no admission fee but food must be purchased. el Pedregal, Scottsdale.
In 2012: April 1, 8, 15, 22, 29

Centerline Artwerks | First Saturdays
Features live performing artists, local painters, sculptors, dancers and musicians. Just east of Murphy Park at 58th Avenue north of Glendale Avenue, event goers will have the opportunity to watch artists at work as well as tour the historic area. Free to attend.
In 2012: April 7

Community Cinema
Free movie and post-show discussion, presented by City of Mesa Office of Diversity, City of Mesa Human Relations Advisory Board, Mesa Arts Center, ITVS Community Cinema and Eight Arizona PBS. Dobson Lecture Hall at Mesa Arts Center. Free.
In 2012: April 19

Copperstate 1000 Field of Dreams Cruise In
Attracts hundreds of cars from local car enthusiasts: classics, muscle cars, exotics, street rods and more. Tempe Diablo Stadium. Free admission.
In 2012: April 15

Country Thunder
Four days of camping, big name country music, arts and crafts vendors, and food in Florence, Arizona.
In 2012: April 12 - 15

Crossroads of the West Gun Show
At the Arizona State Fairgrounds. The shows offer hundreds of tables of interest to both the once a year hunter and the avid collector.
In 2012: April 21, 22

Gathering of Carvers: Katsina Doll Marketplace
The nation’s largest gathering of Hopi katsina doll carvers takes place at the Heard Museum, as more than 100 artists gather to show and sell their unique creations. Enjoy musical performances, book signings, carving demonstrations and drawings. Free admission. Museum admission not included.
In 2012: April 14

Gilbert Art Walk
Fine art in different mediums, all price ranges. Artists qualify to be part of the event through a jury selection process. All art items are original creations. More than 30 booths. Water Tower Park, Gilbert.
In 2012: April 27

Gilbert Global Village Festival
a community celebration of ethnic traditions from countries around the globe. Music, dance performances, visual arts, hands-on multi-cultural children's activities, crafts, food. Free admission.
In 2012: April 21

Gilbert Spring Concerts in the Park
These free concerts take place at the Freestone Park amphitheater, located by the lake inFreestone Park in Gilbert. Bring a blanket or lawn chair.
In 2012: April 12

Glendale Family Bike Ride
This is a ride for all ages and levels of riders, from kids to adults. Both the long (15-mile ride) and short (6-mile ride) routes take cyclists on a leisurely ride through Glendale. Helmets required, may be purchased onsite. This is a free ride with no registration fees.Sahuaro Ranch Park.
In 2012: April 15

Glendale Jazz and Blues Festival
Two days of--what else--jazz and blues! It's Glendale’s longest-running festival. Historic Downtown Glendale.
In 2012: April 14, 15

Glendale's Live at the Library
Musical entertainment at 6:30 p.m. at the Glendale Main Library. Concerts are free. Call 623-930-3573 for more details.
In 2012: April 26

Good Life Festival
An outdoor concert series featuring national and local acts and a variety of activities, including specialty shopping, wine tasting, free spa massage demos, and gourmet food for purchase. Encanterra, a Trilogy Country Club, San Tan Valley.
In 2012: April 14

Goodyear Spring Concert Series
Bring lawn chairs, blankets, food, beverages (no glass) or purchase from our on-site food vendor. Goodyear Community Park. Free.
In 2012: April 6, 13, 20, 27

Brought to you by About.com

Pets of the Month:

Breed: Domestic Short Hair
Gender: Male
Birthday: 5/04/2000

For Photos, more information or to adopt Benny, please visit http://aawl.org/adopt/cats/benny44164

Breed: Chihuahua
Gender: Female    
Birthday: 10/15/2009

More About Dottie

Pleased to meet you! My name is Lavay. I am a beautiful girl with unqiue chocolate brown spots. I am a little shy at first but I enjoy gentle pets and affection! I like toys and will chase after them. I would do best as an only dog, or with another small and polite dog as a companion. When I met a cat here at the shelter I was very polite and should be able to live in a home with other feline friends! I love to be outside! I would enjoy trips to the park and plenty of cuddletime. I am truly a sweetheart. Do you have room in your heart and home for a little beauty like me?!

For Photos, more information or to adopt , please visit http://aawl.org/adopt/dogs/dottie49267

A GMO (genetically modified organism) is the result of a laboratory process of taking genes from one species and inserting them into another in an attempt to obtain a desired trait or characteristic, hence they are also known as transgenic organisms. This process may be called either Genetic Engineering (GE) or Genetic Modification (GM); they are one and the same.

In 2009, the American Academy of Environmental Medicine (AAEM) stated that, "Several animal studies indicate serious health risks associated with genetically modified (GM) food," including infertility, immune problems, accelerated aging, faulty insulin regulation, and changes in major organs and the gastrointestinal system. The AAEM has asked physicians to advise all patients to avoid GM foods.

Ariane Speros is now working with a group to get legislators to require labels on food that contains GMO's. To find out more information and what you can do to help the cause please visit http://responsibletechnology.org/

• interested in purchasing a property (including multiple first time home buyer programs)
• selling a property
• in need of finding a renter for an investment property
• in need of finding a home to rent

Apartment Source, and its subsidiary, Success Real Estate Group, is a full service, state of Arizona, licensed real estate brokerage.

The decline in home values and the lethargic housing market are coming to an end in Phoenix, and where Phoenix goes, the rest of Arizona will follow, says an Arizona State University real estate expert.

"In greater Phoenix, the worst is definitely over," said Michael Orr, director of the Center for Real Estate Theory and Practice at ASU's W.P. Carey School of Business. " ... Most of the signals I look at are looking up."

Orr, who tracks real estate data for the Phoenix metro area including Maricopa and Pinal counties, said in an interview for Friday's Arizona Week that the Tucson real estate market usually follows Phoenix trends by up to 12 months. The two metro areas take in nearly 90 percent of the state's housing market.

Orr said prices are beginning to rise as housing inventory falls, and that is leading some builders to become active again. But he said demand will outstrip supply for a while.

"Each week that goes by, we're seeing less and less homes available, so anybody who's in the market to buy is getting more frustrated and more desperate, and that tends to mean they'll bid higher prices against their competition," he said.

At the same time, Arizona foreclosures remain above the national average. RealtyTrac, an Irvine, Calif., company that follows national foreclosure trends and markets foreclosed properties, reported that in February, Arizona had 9,131 foreclosures, up 4.4 percent from January.

The number was 41 percent below what it was in February 2011 for the state, and Orr said the year-to-year number is the one to watch. He said his own data on foreclosures is more conservative than RealtyTrac's, but he noted a similar year-to-year decline in the state.

"The good news is that we're seeing a continued downward trend in foreclosure activity in Arizona," RealtyTrac Vice President Daren Blomquist said in an Arizona Week interview. " ... This was a continuation of a trend we've been seeing for a long time. In Phoenix, 15 out of the last 16 months, we've seen decreasing foreclosure activity."

At the same time, Blomquist said, the numbers in Arizona were still third highest in the country, and Phoenix still ranked 14th worst among major metropolitan areas for foreclosures.

Despite that, Orr said the state's housing market has shifted in the last few months, and unlike others, he sees recovery coming.

"People are saying we need to get used to the market being this low and it'll stay low," Orr said. "I don't think that's going to happen. We're going to have something of a snap back. And, given the very low supply (of houses for sale) we currently have, it's going to be a feeding frenzy for quite some time."

Prices are rising, in some cases as much as 5 percent a month, he said. Still, because at the bottom of the market they had fallen by 58 percent, there is a long ways to go to get back to normal.

Even with rising prices, home ownership is a relative bargain, both in home costs and mortgage lending rates, said David Godlewski, president of the Southern Arizona Home Builders Association. In an Arizona Week interview, he said it is a good time to buy.

Report provided by Michael Chihak, Arizona Public Media

No Regrets

Despite the ups and downs of the housing market and the decline in home values, most homeowners, including those who are underwater on their mortgages, don’t regret owning a home. In a recent survey by the National Association of Home Builders, three out of four Americans believe that owning a home is the best long term investment and is worth the risk of a sometimes-volatile housing market. Approximately 95% say they are happy with the decision to own a home.

That sentiment is also strong among homeowners who are underwater on their mortgages. Nearly two-thirds (65%) believe owning a home is worth the risk, and 83% say they are happy with the decision to own a home. Four out of five homeowners (80%) say they would advise a friend or a family member to buy a home, while slightly fewer underwater homeowners (78%) would do the same. Only 19% of homeowners who are underwater believe homeownership is too risky. 

I’m sure you are hearing rumors or have experienced it first hand; it’s hard these days to buy a home in the greater Phoenix and Scottsdale real estate market.  We have officially entered into a “seller’s market” and some indications show that its been a seller’s market for the last 12 months.  The average days on the market according to MLS statistics in February was 3.27 months and over the last 12 months it was 3.35 months.  Anything below 4 months is officially considered a sellers market.

So what does that mean to seller and buyers alike?

To buyers, it means a hard time finding a home and getting an offer accepted.

-          The lower the price range, the less inventory and the more competition.

-          The better the area (ie high demand areas), the stronger the competition.

-          The nicer the house, the strong the competition.

All in all, it is very competitive in our market today.  I am consistently seeing:

-          Multiple offers

-          Offers well above list price

-          Cash buyers winning out

To buy a Scottsdale home, its important to work with someone that understands what is happening in the market, to look at houses quickly (possibly even same day) as they come on the market, to be prepared to offer over list price, and to be prepared to be competing with many other offers (I’ve seen two that each had over 20 offers on them, and 10-15 offers is definitely not a stretch).

From a selling perspective, we are seeing prices gradually move up and hopefully this trend will continue.  And while all homeowner’s are excited about this frenzy, its important to note that houses should still be listed at a price that is within the range of what other comparable properties are selling for, for a couple of reasons:

-          If the buyer is obtaining financing the home must still appraise.

-          If you overprice your home its going to get “stale” and once it has many days on the market buyers aren’t even going to want to look because they think there is something wrong with it or its overpriced and they would have to deal with unreasonable sellers

-          Many of the buyers in this market are cash buyers, they are looking for a “good deal” and won’t be willing to pay over market value in most cases for a home

The market is ever changing, however it has changed so much over the past 12 months that many people truly don’t understand what is going on out there and why.  Its simple laws of economics, too little supply with high demand = price increases and in our case, our market has really turned into a crazy frenzy.

FEBRUARY SALES STATISTICS

-       Sales in February increased 12.3% over the previous month to land at 7,249.  February’s sales figure of 7,249 is up 1.3% over the same figure in 2011.

-       Sales above 7,000 units are seen as robust for the Valley’s market.

-       New listings added to the market fell in February by 9.7% to 8,884. This figure is 15.8% below the new inventory figure for February 2011.

-       Total inventory for February was 23,736, down 5.2% from January and 41.6% from February 2011.

-       Total inventory has been on a steady downward path since February of 2011.

MONTHS SUPPLY OF INVENTORY (MSI)

-       Valley wide month’s supply of inventory declined slightly in February to 3.27 from 3.88 in January.

-       MSIs below 4 months are typically seen as Sellers’ markets.

-       The Valley’s MSI dropped below 4 months for the first time in March 2011 and has remained a Seller’s market since.

-       The twelve month MSI aver-age is 3.35 months.

NEW LIST PRICES

-       Trend lines for new list prices continued on an upward tilt for both average and median list prices. Feb-ruary’s average list price of $229,700 represents a gain of $41,000 over July 2011, when average list prices started to rise.

-       Median list price, which began to rise in August 2011, gained $20,000 over the August to February period, to land at $144,900.

SALES PRICES

-       Average sales price began to rise incrementally in August 2011, from a low of $151,400 to February’s $166,600, a gain of $15,258.

-       Likewise, median sales price climbed from a low of $108,300 in May 2011 to $122,000 in February, a gain of $13,700.

While the pricing movement is slow, it is definitely upward.

 FORECLOSURES

 -       Phoenix foreclosures pending, which fuel foreclosure sales, continued on the downward trajectory begun from a high of 50,568 in November of 2009 to February’s figure of 17,833.

 -       The decline in foreclosures pending represents a 64.73% decline from its 2009 high.

DISTRESSED SALES

-       February’s distressed sales (3,723) as a percentage of total sales continued downward for the fourth month in a row to 51.4%, well below the 60% barrier crossed in November 2011.

-       At their highest level, in September 2010, distressed sales, composed of foreclosures and Scottsdale short sales, represented 74.1% of total sales.

-       In February, there were 1,687 lender owned sales and 2,036 short sales.

-       In November 2011, short sales displaced foreclosures as the dominant component of the distressed property mix. The rise in short sales over lender owned sales, indicates a lender preference for work out over foreclosure.

-       This trend is good news for Sellers whose must sell under distressed conditions.

 Data gathered by the Arizona Regional Multiple Listing Service (ARMLS)

For more information please go to www.SouthScottsdaleHomes.com

 It’s a little known fact, but there are ways to invest in real estate using qualified retirement funds.  Many people aren’t aware of this and thus are letting the amazing opportunities in today’s Arizona real estate market pass them by.  Most people feel that they must have a large amount of cash available, be completely secure in their jobs, have perfect credit or all of the above!

Many people who are cash-poor are jumping into the real estate market by using their IRA funds. They are opting out of the volatility and risk of the stock market and fortifying their retirement savings. The concept is not new, but probably never more appropriate as an investment strategy than now considering you can buy properties in Arizona for pennies on the dollar.

CREATING YOUR IRA LLC

A properly executed IRA LLC is the most popular vehicles to use retirement funds for real estate investments because it provides a solid structure for asset protection after you identify a property to purchase you need to find a reputable custodian for your IRA account. Very few IRA custodians allow real estate investments. Next you need to set up your LLC (limited liability company) with your IRA as a member (owner). This is a crucial step because there are stringent requirements which must be met for the IRA LLC to pass muster with the IRS.

FUNDING YOUR IRA LLC

Because of the potential return-on-investment, a real estate IRA LLC is a great alternative to IRAs that invest in the stock market. You can fund your IRA LLC by rolling over existing retirement accounts such as traditional IRAs, Roth IRAs, SEP IRAs, 403(b)’s, qualified annuities, and Keoghs into the new IRA. You can also combine funds from several accounts into your new IRA LLC.

INVESTING IRA FUNDA

Once your IRA LLC is created and funded, the LLC can invest in virtually any type of real estate, including Phoenix single family homes, apartments, condominiums, commercial real estate, or raw land. Because of self-dealing restrictions, your IRA LLC cannot be used to purchase your personal residence or vacation home.

 INCOME AND EXPENSES

Avoid IRA custodians that require their authorization (and charge transactional fees) for expenses of operating your LLC. Instead, as a manager of your IRA LLC, you should have control of your checkbook. You will open a bank account in the name of the LLC which will serve as the operations account to purchase and maintain your real estate investments. All income from the real estate will flow into--and all operating expenses will be paid from—this account, so it important to keep a enough cash in the account to cover taxes, insurance, mortgages, maintenance fees, and other expenses.

GROWTH OPPORTUNITY

            You do not need to hold Arizona real estate in an IRA LLC for a long period of time. In fact, you, as manager, can buy and sell properties whenever opportunities arise. In today’s market, flipping real estate can be extremely profitable. But beware—profits must stay in the IRA to avoid taxes and penalties.

 ASSET PROTECTION

            Your IRA LLC will carry the same asset protection of all properly administered limited liability companies. If, for example, someone is injured at a rental property, the plaintiff’s remedy is generally limited to the assets in the LLC. In most cases, your personal assets outside the LLC are protected.

AVOID PROHIBITED TRANSACTIONS

            Prohibited transactions such as self-dealing and conducting business with disqualified people could cost you steep penalties, so be sure an attorney with plenty of knowledge and experience in forming IRA LLCs sets up your entity and drafts the operating agreement. The custodian will require specific language in the operating agreement to accept your account. The rules and regulations can be overwhelming, but if your IRA LLC is properly established and maintained, you should be well on your way to a more comfortable retirement.

For More Information please contact William Gibney Esq, 602-953-0006, bill@wgibneylaw.com, http://wgibneylaw.com

I’m starting to hear it continually, almost every day, “What is going on with our Phoenix and Scottsdale real estate markets?”  People are hearing stories from friends, co-workers, and the guy next to them in line at Starbucks.  Are we seeing a shift, and more importantly, will the trend continue?

It seems as though 2012 may be the year where we start to see a steady recovery.  2011 showed strong signs of heading in that direction:

-      MLS had the highest year in unit sales of all time other than 2005

-      Prices in both November and December outperformed those month in 2010 in both median and average prices

We have also seen a shift in the Phoenix and Scottsdale foreclosures and short sales market.  In 2011, bank owned sales accounted for 42% of the sales and 23% for short sales.  In November and December those figures equalized showing us that bank owned homes are starting to dry up and Phoenix and Scottsdale short sales have become more of the norm.

We are already seeing increased demand and limited supply in 2012, which has been carried over from 2011.  Another motivating factor for sellers in 2012 is the expiration of the Mortgage Forgiveness Debt Relief Act that forgives tax debt to some short sale sellers.  With this expiration many sellers who have been on the fence about short selling will take advantage of the opportunity before the statute expires.

We are seeing 2.5 months supply right now in our market, again showing that there is more demand than supply.  4-6 months supply typically indicates a “normal” market.  Buyers will continue to deal with multiple offer situations, competing with an abundance of cash buyers, and having to offer above list price in this market, in the hopes of buying the home of their dreams.

Taking all of this into account, 2012 should be a year where we see positive steps forward in the Arizona real estate market.

2011 Shows Positive Trends for the Phoenix Real Estate Market

BY ALYSSA SAMUELSON

REALTOR/Designated Broker, Success Real Estate Group

Certified Distressed Property Expert (CDPE), Certified Residential Specialist (CRS), Accredited Buyer's Representative (ABR), Short Sales and Foreclosures Certification (SFR), Graduate Realtor Institute (GRI)

_______________________________________________________________________________________________

DON'T FORGET!

TAX FORGIVENESS ACT EXPIRES IN 2012

IF YOU ARE CONSIDERING SHORT SELLING ***NOW*** IS THE TIME TO BEAT THE DEADLINE!

****** ARE YOU CONSIDERING SHORT SELLING YOUR HOME?*******

ARE YOU FAMILIAR WITH THE HAFA PROGRAM?

---  $3,000 cash credit at closing

---  Automatic release of any deficiency judgment

HURRY!  The federal tax exemption expires this year.

We have successfully negotiated multiple HAFA transactions!  Contact me today for more info!

Single family home sales were up over 12% from 2010 to 2011.  In 2011 there were 84,518 purchased in the greater Phoenix and Scottsdale homes markets as compared to 75,200 in 2010, 80,313 in 2009 and 51,409 in 2008.

Overall, more Arizona properties were purchased in 2011 than the previous 3 years.  We saw an 11.9% increase in all property sales in the area from 2010 to 2011.

The average days on market for properties was 102 days in 2011, similar to 2010 at 101 days. In 2009 average days on market was 108 days and 122 days in 2008.

In 2011 we saw the average sales price to list price at 96.11% meaning that homes on average sold at 96.11% of the list price. This is slightly higher than in previous years at 95.68% (2010), 95.91% (2009), and 95.36% (2008).

The average sales price in 2011 was $156,774.

The average square feet of homes purchased remained in line with previous years and stayed within the range of 1,921 to 1,991 feet.

The number of short sales in 2011 increased while the number of lender owned (REO-real estate owned) properties decreased.  We also saw normal or traditional sales increase in 2011 over 2010.

Phoenix Foreclosures Sales

Greater Phoenix Area and Scottsdale Short Sales

Normal/Traditional Sales

In Maricopa county foreclosure notices decreased relatively dramatically in 2011 with 56,996 notices.  In 2010 we saw 84,106, 103,341 in 2009 and 79,227 in 2008.

We saw investors come out of the woodwork in 2011 with regard to purchasing properties at the Maricopa county auction (trustee’s sales).  The majority of the below purchases can be attributed to investors who then completed a fix and flip on the property.

Data provided by The Cromford Report.  For more information please go to www.SouthScottsdaleHomes.com