Reflecting on 2012 and what’s ahead for 2013

There is no doubt, 2012 has rewarded home owners, to which they say it is about  time!  Some reports are indicating a 15% – 25% increase in home values over  the last 12 months. The graph to the left shows the average $/sq.ft. for homes sold in Gilbert,  which has  rebounded to pre-2009 levels.  Can we expect this favorable trend to continue in 2013, or is this another bubble that will burst in 2013? They tell me I’m an analytic which probably explains why  I’ve included charts and graphs to explain my reasoning, so read on.

What’s happening with distressed properties?

To gain a better  understanding of the market, it is critical to understand the market for distressed properties. I like this graph to the right because it shows the pending foreclosures over time.  The  decrease which began in 2010 and accelerated in 2011, shows  why foreclosures have seen a significant reduction during 2012. It is very likely that it will fall below year-end 2007 levels by the end of this year.  Pending foreclosures are the fuel for the foreclosures/short sale pipeline so this trend shows that the real estate market is heading towards normalcy.

The specific impact of the reduction in distressed sales can be seen in the graph to the left which shows the percentage of distressed sales by city broken down by foreclosures and short sales.   To appreciate where we’re at, we must look back a year ago.  Nearly all cities have experienced a double digit reduction in  the percentage of distressed sales from a year ago.  Instead of torturing you with another graph, I’ll give you the  summary.

 

City               %Distressed Sept. 2011     %Distr.Sept. 2012             Change

Gilbert                             61%                               38%                         -23%

Chandler                         61%                               38%                         -23%

Mesa                                66%                               42%                         -24%

Queen Creek                  65%                                36%                         -29%

Scottsdale                      44%                                 27%                         -17%

Surprise                          73%                                 49%                        -24%

This is over a 12 month period which equates to a 2% decrease per month in many areas.   Distressed sales, foreclosures and short sales, will still be around for a while but the trend continues to be extremely encouraging.

What happens when home values rise?

As distressed properties (foreclosures and short sales) are decreasing and home values are rising, this is welcome news to  underwater home owners .  Before, these home owners could not voluntarily sell their homes.  Rising home values provide the opportunity for more owners to participate in a traditional sale which allows more homes to come on the market.  Since the 3rd quarter of 2011, the increase in prices has been driven by the lack of supply of homes for sale. In order to view the balance between supply and demand we must refer to, you guessed it another graph! The months of inventory graph to the right shows that balance between supply and demand.  A rise in the available homes for sale with constant demand  increases the months of supply because it takes longer for that demand to consume the supply.  We are already seeing an increase in the months supply in many cities which means that as prices increase and more homes come on the market, it will take longer for homes to sell and the rate of increase in prices will slow down.  A six month supply of homes is consider normal so our market is still very healthy but an update trend indicates a cooling off.

One of the hottest market segments has been lower priced homes that can be purchased and rented out with immediate cash flow offering a significantly better rate of return than other investment alternatives.   As prices increase, the ROI comes down and a point will come where the reduced return does not justify the investment and investors will be leaving  the market.

As the Phoenix housing market returns to what may be close to a normal market, prices will continue to increase but will be moderated by an increase in the supply of  homes.  Phoenix was one of the first markets hit by the bubble so the fact that we’re one of the first ones out should not be a surprise.  Foreclosures and short sales will continue to be part of the equation but a smaller percentage.  Look for continued appreciation in 2013 but not the frenzied price recovery that we’ve seen in 2012.

Your thoughts?

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Related Posts:

Distressed Sales in 2012 compared to 2011

Where’s the  Phoenix market going in 2012?

Luxury Waterfront Property in Phoenix

$949,000 :: 1303 N Regatta Drive, Gilbert AZ, 85234

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4 beds, 4.50 baths
Home size: 4,492 sq ft
Lot Size: 10,276 sq ft
Added: 01/25/17, Last Updated: 05/25/17
Property Type: Single Family - Detached, Residential
MLS Number: 5551340
Tract: Regatta At Val Vista Lakes Amd Lot 1-108
Status: Active


Beautifully remodeled home located in the Heart of Gilbert! water front property looking straight down lake with no obstructions! Gorgeous stone work throughout the property, tiled pool and complete outdoor BBQ with a built in Pizza Oven and commercial grade misting system. The kitchen has top-of-the-line stainless appliances and built-in coffee maker. Unique, arches solid core doors and ornate iron work! AC and heating system replaced in May 2017! Custom garage storage and epoxy floors! Attention to detail is evident in every square foot of this home!

Listed with US Preferred Realty


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$579,000 :: 4493 S Wildflower Place, Chandler AZ, 85248

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4 beds, 2.50 baths
Home size: 2,699 sq ft
Lot Size: 9,755 sq ft
Added: 05/20/17, Last Updated: 05/25/17
Property Type: Single Family - Detached, Residential
MLS Number: 5608561
Community: Laguna Cove
Tract: Laguna Cove At Ocotillo
Status: Active


WATERFRONT Single Story Pool home in gated Ocotillo community. Laguna Cove is a highly desirable community within walking distance to award winning Chandler Schools. So many upgrades done to this magnificent home. Some include Salt Water Pool, Water Filtration System, Heated Pool, Home comes with a paddleboat, furniture avail on sep bill of sale. Split floorpan, 2 beds and office and Master on other side. Large Kitchen and island leading the the family room and stone fireplace, formal dining and living room. Home is oriented with dramatic windows looking onto the resort backward and water views. Private entrance to pool area from master. Bonus fridge in laundry room. This is a dream home and won't last long.

Listed with Arizona Elite Properties


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$2,500,000 :: 1440 W Island Circle, Chandler AZ, 85248

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7 beds, 8.00 baths
Home size: 7,684 sq ft
Lot Size: 39,452 sq ft
Added: 11/11/16, Last Updated: 05/25/17
Property Type: Single Family - Detached, Residential
MLS Number: 5524036
Tract: Island At Ocotillo Lot 1-23 Tr A
Status: Active


A stunning jewel in desert! Hidden on a prime, quiet cul-de-sac in the gated custom community of the Island at Ocotillo. True resort elegance, with 180 degree views of Ocotillo's 27-holes of golf, water & panoramic Estrella Mountain sunsets. Set on nearly an acre, this 7 BR/8 BA luxury property welcomes you with a portico entrance featuring the gentle splash of a heron-inspired fountain, arched hand-carved double doors, stained glass, dramatic curved staircase, marble columns. Formal LR/DR, coffered ceilings, double verandas, main level Master Retreat, lower level Media/Game Room w/Guest Quarters.Spectacular entertainer's backyard has 1400 sf diving pool w/waterfall grotto & slide from spa to pool, cabana w/grill & wet bar,putting green & sprawling stone patio. Surrounded by lush fairways.

Listed with Gold Trust Realty


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$535,000 :: 3125 S Laguna Drive, Chandler AZ, 85248

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4 beds, 3.00 baths
Home size: 2,918 sq ft
Lot Size: 8,120 sq ft
Added: 05/24/17, Last Updated: 05/24/17
Property Type: Single Family - Detached, Residential
MLS Number: 5610329
Tract: Harbour Club At Ocotillo Lt 1-93 Tr A-E
Status: Active


Waterfront home with loads of custom upgrades! Over 150k in upgrades recently added. Enjoy resort style living in the highly sought after Ocotillo Lakes. Grand entryway featuring custom metal door and chandelier. Travertine and hardwood flooring throughout. Kitchen features granite countertops, custom cabinets, openings to both living and great room with bar, perfect for entertaining. Incredible lake view with private dock. Master Bedroom features patio with elevated views great for outdoor living. Basement boasts a full bedroom and bath and separate living quarters. And don't forget to relax at the pool overlooking the Ocotillo Lakes!

Listed with West USA Realty


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$344,900 :: 1251 E Chicago Circle, Chandler AZ, 85225

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3 beds, 2.50 baths
Home size: 2,070 sq ft
Lot Size: 5,262 sq ft
Added: 01/05/17, Last Updated: 05/24/17
Property Type: Single Family - Detached, Residential
MLS Number: 5542392
Tract: The Springs Unit 2
The price of this listing was last reduced on 4/22/2017 by 0%
Status: Conditional


Resort like waterfront property in Chandler in the highly desired neighborhood ''The Springs''. Beautiful 3 bedroom plus loft home in a quiet cul-de-sac neighborhood. Brand new wood tile flooring throughout main level and upstairs bathrooms with 7 inch baseboards. Fresh paint throughout the home. New interior doors through out the home. Kitchen features granite counter tops, refinished cabinets, travertine backsplash and a perfect view of the water. Upstairs is the master bedroom and other 2 bedrooms. New granite countertop and travertine shower in master bath, new bath tub and tile in 2nd upstairs bathroom. The master bedroom features a private deck overlooking the backyard with it's amazing views and newly done pebble tech pool. Seller to give $1500 credit for exterior paint.

Listed with Cactus Mountain Properties, LLC


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$849,900 :: 4360 S Rosemary Place, Chandler AZ, 85248

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5 beds, 4.50 baths
Home size: 4,307 sq ft
Lot Size: 9,741 sq ft
Added: 02/06/17, Last Updated: 05/24/17
Property Type: Single Family - Detached, Residential
MLS Number: 5557514
Community: Ocotillo
Tract: Windward
The price of this listing was last reduced on 4/21/2017 by 2%
Status: Active


Back on Market! Their loss, your gain! Stunning Camelot 5 Bed/4.5 Bath luxury residence w/unique spaces that complement your lifestyle. Room for home gym, artist's studio, writer's loft, or maybe a family study? This magnificent home has space for everyone & sits on one of Ocotillo's many lakes w/ gorgeous sunset views from the view deck above. Beautiful hardwoods, w/ 5" baseboards, crown molding, & coffered ceilings greet you at the door. Enjoy the paver courtyard next to the great room for entertaining, or relax in your pebbletec negative edge salt pool while the BBQ is heating up! Back stairs lead to the spacious Owner's Suite & Theatre/Flex room! Beautiful finishes & accents include upgraded lighting, knotty alder cabinets, granite counters & butler's pantry. See More in Document Tab!

Listed with Re/Max Infinity


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$600,000 :: 1002 W Nautilus Drive, Gilbert AZ, 85233

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4 beds, 3.00 baths
Home size: 2,719 sq ft
Lot Size: 9,100 sq ft
Added: 03/30/17, Last Updated: 05/23/17
Property Type: Single Family - Detached, Residential
MLS Number: 5582795
Community: The Islands
Tract: Catalina Bay At The Islands Lt 1-67 Tr A-I K-M O-
Status: Active


GORGEOUS UPDATED lakefront property in The Islands! Over $120k in renovations over the years, including: kitchen, baths, flooring, AC units, granite, SS appliances, water softener & heater, int/ext paint, S & W facing windows, lighting/fans, security doors, and much more. Formal LR & DR, eat-in kitchen, FR and convenient bed/bath downstairs. Master retreat w sitting rm & walk-in travertine shower, soaking tub, new cabinets. 2 more bedrooms plus bath upstairs. A ''MUST SEE'' BACKYARD! A TRUE tropical retreat with mature landscaping, flowering shrubs, pool with waterfall, several cozy sitting areas, dock by lake, extended covered patio -- all perfect for relaxing or entertaining guests. Enjoy holiday boat parade from backyard or boat to Islands park for all community events! Come see!

Listed with Keller Williams Realty East Valley


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$590,000 :: 552 N Mondel Drive, Gilbert AZ, 85233

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4 beds, 2.50 baths
Home size: 3,552 sq ft
Lot Size: 8,625 sq ft
Added: 03/04/17, Last Updated: 05/22/17
Property Type: Single Family - Detached, Residential
MLS Number: 5570324
Community: Playa Del Rey
Tract: Playa Del Rey Amended
The price of this listing was last reduced on 5/22/2017 by 2%
Status: Active


The minute you walk through the European-custom iron front door, you will be impressed. Majestic cathedral ceilings greet you. Stunning 4 bedroom 2.5 bathroom home located in your very own water ski subdivision of Playa Del Rey. So many upgrades: remodeled kitchen, Viking Refrigerator,6 burner cooktop and Fisher Paykal dishwasher. Beautiful curved wooden staircase leading to loft and master. Picturesque view from balcony. Terraced patio, widows walk and your own private dock, exercise pool and backyard. See supplement for more features. Have a boat? Well no more storage or wondering how to store that new boat. Not a boater? You will enjoy a spectacular resort-like back yard from your pool, patio, deck or balcony. An entertainers dream come true. Come and see for yourself before it's gon 552 N. Mondel Dr.Gilbert, AZ 85234Feature sheetLake- front with resort-like back yard, catch and release from your own backyard. Boat Dock (boat for sale too)Custom designed European front door ($12,000 cost new)Cathedral ceilingsHigh- end Chandelier in formal living room and above formal dining room table convey with the home.Custom drapes and cornices Trash compactor in laundry room, white cabinets convey with propertyKitchen:Cherry cabinets with pull-out drawersViking Refrigerator, gas cook top, Fisher Paykal dishwasher, under mount lighting under cabinetsMaster Bedroom and Bathroom:Double sinks, walk-in shower and temperature controlledCustom built-ins in master closet, built-in ironing board, extra linen closet in masterCustom closets in two of the bedroomsRemodeled powder room with bowl sinkUpgraded thermostats and switches (proximity switches)Surround sound and speakersWired for Ethernet3 A/C Units- 14 seer, one is approximately 4 years new.Water heater replaced in 2014Whole house water filtration systemPull down ladder in garagePool: Salt water, pebble tec with variable speed pumpExercise pool, water featureTerrace yard with three seating areasCovered patio and balcony off loft, fountains in front and back convey.Gated Community, Recreation room, catch and release fishing.

Listed with Re/Max Infinity


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$429,000 :: 3761 S Hawthorn Drive, Chandler AZ, 85248

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3 beds, 2.50 baths
Home size: 2,206 sq ft
Lot Size: 8,986 sq ft
Added: 04/26/17, Last Updated: 05/21/17
Property Type: Single Family - Detached, Residential
MLS Number: 5595906
Tract: Waters Edge At Ocotillo
The price of this listing was last reduced on 5/17/2017 by 4%
Status: Active


WATERFRONT...Relax in your private backyard oasis overlooking the beautiful scenery from your waterfront home. Entertain guests under large covered back patio, fire up the new built-in grill, and take a swim in newly upgraded pebble-tech pool. Step inside this gorgeous 3 bed/2.5 bath/3- car garage home with numerous upgrades including laminate and tile flooring. From the large loft, step outside onto the deck with new shade awnings, and enjoy the view of the golf course. Kitchen has upgraded kitchen cabinetry, Corian countertops, black granite sink, stainless steel appliances and newly installed stainless steel vent over the ceramic-top stove. Enjoy new carpeting, plantation shutters, and large walk-in closet in Master retreat. Master bath has upgraded tile shower, jetted bathtub and marble counters. Too many upgrades to mention! Schedule a showing today!

Listed with Long Realty Partners


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!


$725,000 :: 1302 N Crystal Shores --, Gilbert AZ, 85234

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5 beds, 3.00 baths
Home size: 3,322 sq ft
Lot Size: 10,149 sq ft
Added: 05/18/17, Last Updated: 05/21/17
Property Type: Single Family - Detached, Residential
MLS Number: 5607393
Community: Val Vista Lakes
Tract: Crystal Shores Amd Lot 1-82 Tr A-I
Status: Active


Lifestyle. This home & neighborhood are about a lifestyle. Clubhouse events, community events, boat parades, luminary night, etc....This is a one of a kind home in a one of a kind community!! This home is located right on the tip of a peninsula so the views are spectacular!! The proximity to the clubhouse is ideal....just a short boat ride away. The entire home was remodeled in 2015. Wait until you see this gourmet kitchen & breathtaking backyard! Click ''More'' or Supplemental Remarks for more details about the home $265,000.00 in upgrades and improvements in the past 18 months!!*Kitchen: Subzero Built In Refrigerator, Wolf-6 Burner gas stove top w/ indoor Grill, Dual Wall ovens, Dual (2 Full Size) Bosch Dishwashers, Subzero Beverage Fridge, Appliance Caddy, Charging Station, Pass Thru Window to the backyard Bar, Quartz Sink, & Travertine backsplash ($89,000 Kitchen!!)*Over $20,000 in new flooring!*One of the largest docks in VVL! $21,000.00 Trex Dock w/ Lights & Lifetime warranty*Outdoor Kitchen with Gas Fire-bowls, Gas Grill (Very High End Cal Flame Grill), Fridge & Sink. ENTIRE Back-wall & Sidewall has been stoned as well as the pillars & Outdoor Kitchen. The covered patio is almost 500 Sq Ft.!! (Backyard Renovations=$110k!!) *New Awnings 2017*Outdoor Shower*Two Laundry Rooms (One upstairs and one Downstairs) ($2800 to add upstairs laundry!) *Stone Fireplace with Hearth and Mantel*Wood Shutters Throughout*HUGE Mainfloor Bedroom easily converted into a 2nd Master Suite*Master Suite has sitting area, walk-in closet with built in storage (Drawers and Shelving), Sitting area, Double Door Entry w/ Glass Transom, Exit to 332 Sq Ft. Private Balcony overlooking the lake, 2 Ceiling Fans *New Roof & New Kitchen in 2015*Two New HVAC 2015($19,800!! 1-16 SEER, 1-18 SEER)*Surround Sound Throughout/WiFi*2015 all new lighting (Interior and exterior)*New Water Softener 2015*Security System*50 Gallon Gas Water Heater new in 2015*53 FEET of Water-frontage ! WOW! *$3,000 for Insulated Garage Doors*3 Walls of Garage Storage as well as a built in Work Bench*RV Gate*Borders a Common area (No One on 2 Sides!!)*One of the biggest complaints I hear about a backyard pool on a lakefront home is "No Privacy". This is NOT the case here! The pool is tucked away for privacy!!*4922 TOTAL UNDER ROOF SQUARE FOOTAGE! This is a BIG Footprint for Indoor/Outdoor Living!!

Listed with United Brokers Group


Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!