The financial meltdown has impacted the lifestyles and livelihoods of families across the country. With our economy largely based on home building, Phoenix was particularly hard hit, as were areas of Florida, Nevada and Michigan. Although devastating, economic downturns are a normal part of the growth cycle and I am confident that Phoenix will recover soon as we diversify.
With recovery on the horizon, there has never been a better time to buy a home or purchase an investment property in the Phoenix area. For those with the financial ability and desire, the Phoenix real estate market is ripe for the picking. Housing prices are down, interest rates are in the high 4s, and potential homebuyers have their choice of homes at a range of price points.
Numerous economists project that the Phoenix housing inventory will gradually decrease and that by 2014 housing demand will outweigh supply. Over the next few years, home prices will begin to rise as inventory and sales come into balance.
Growth in metropolitan Phoenix is based on our wonderful lifestyle and climate. Inflow migration, a key economic driver, is holding steady. With more than 300 days of sunshine, an average temperature of 74.2 degrees and no hurricanes, tornados, volcanoes, mudslides or snowstorms, Phoenix is a phenomenal destination well positioned for a healthy recovery. There is no doubt that Arizona will rally and the Phoenix real estate market will again prosper.
Home prices in Phoenix overall are down over 50%, and there may be a way to go before we hit bottom. Foreclosures are still a significant driver in the market now, and with recent new moratoriums the sheer number of foreclosed properties being released onto the market has now slowed to a trickle.
ReplyDeleteThat leaves many (the majority right now) homes listed on the market as "short sales" which can be more challenging to buy as there are typically two mortgages - a 1st and 2nd. That can mean months of delays for buyers waiting for a short sale to be "approved." That is why traditional sales or bank owned (REO) properties tend to be the most in-demand for buyer's right now.
For those looking to buy and who can qualify, there are certainly some incredible deals out there. But does it makes sense to buy now when prices may still drop further?
There is no simple answer. Timing markets of any kind is impossible, but for those who like the security of owning a home and the comforts of a neighborhood they like... and are committed to living in that home over the long term (10+ years) then buying now can make sense. I always say that people should buy for the right reasons - not for investment or expected gains - but for the lifestyle that a home provides over the long term.
The number of mortgage-holders who are "underwater" on their current home (over 60% in Phoenix) will probably have the greatest effect on the markets going forward.
BRETT BARRY