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

$250,000 :: 242 E LEAH Lane #1, Gilbert AZ, 85234

3 beds, 1.75 baths
Home size: 1,363 sq ft
Lot Size: 7,405 sq ft
Added: 02/20/18, Last Updated: 02/20/18
Property Type: Single Family
MLS Number: 5725917
Community: SUN VIEW ESTATES 2 LOT 85-199
Tract: SUN VIEW ESTATES 2 LOT 85-199
Status: Active


NO HOA. Beautiful 3 bed 2 bath home that you can just bring your possessions and move in. Wood and tile floors through out. Kitchen has upgraded stainless steel appliances. Also features granite counter tops. The Arizona Rm is enclosed and screened in and ready for enjoying Arizona climate. Nice Mesa neighborhood with mature landscaping. Large pebble tech play pool for all summer enjoyment. Pool has pop ups and crawler. This property has a flat rate solar lease as part of the sale. Lease will need to be assumed by the buyer. No escalation clause. very energy efficient. The property also has RV gate and RV parking and NO HOA.

Listed with RE/MAX Alliance 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/!


$185,000 :: 4082 E WINDSOR Drive, Gilbert AZ, 85296

Property Photo

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2 beds, 2 baths
Home size: 967 sq ft
Lot Size: 435 sq ft
Added: 02/20/18, Last Updated: 02/20/18
Property Type: Single Family
MLS Number: 5725899
Community: GARDENS PARCEL 5 CONDOMINIUM A
Tract: GARDENS PARCEL 5 CONDOMINIUM A
Status: Active


Here is a a very cute and clean townhome with 2 bedrooms and 2 bathrooms. Kitchen has stainless steel appliances with fridge and built in microwave. Granite countertops and cherry cabinets. Tile in family room and kitchen. attached garage with washer and dryer included. Community has pool, grass play field, basketball court, playground.

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/!


$270,000 :: 2522 W CURRY Street, Chandler AZ, 85224

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4 beds, 2 baths
Home size: 1,710 sq ft
Lot Size: 8,712 sq ft
Added: 02/14/18, Last Updated: 02/20/18
Property Type: Single Family
MLS Number: 5723331
Community: CARRIAGE LANE 8 LOT 240-406 &a
Tract: CARRIAGE LANE 8 LOT 240-406 &a
The price of this listing was last reduced on 2/14/2018 by 2%
Status: Active


Great 4 bedroom family home in Chandler with nice size yard and fenced pool. Family room with fireplace and separate living room. Open kitchen with stainless appliances. Master has private exit to pool and walk in closet. Neighborhood is close to the 101 for shopping and dining. Hard to find single level block home with 4 bdrms and a pool in this price range. Move in ready.

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/!


$467,000 :: 2863 E LONGHORN Drive, Gilbert AZ, 85297

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4 beds, 3 baths
Home size: 2,859 sq ft
Lot Size: 8,712 sq ft
Added: 01/31/18, Last Updated: 02/20/18
Property Type: Single Family
MLS Number: 5716942
Community: HIGLEY MANOR PHASE 1 AND 2
Tract: HIGLEY MANOR PHASE 1 AND 2
The price of this listing was last reduced on 2/5/2018 by 1%
Status: Active


Absolutely beautiful, Great Basin floor plan. 4 bedrooms, 3 bathrooms in the highly sought after Higley Manor Community. Inviting front courtyard which features an elegant wrought iron gate, leads you to a spacious open concept home. Upgraded accent wall in dining room greets you at the front door. Kitchen features well-appointed upgrades, such as a gourmet style set up with stainless steel appliances. Backyard features a beautiful koi pond and upgraded, low-maintenance landscaping. Home also features surround sound, OWNED solar panels to provide big savings on your energy bills, 3-car tandem garage, tubmled paver driveway, and so much more!

Listed with eXp 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/!


$336,000 :: 2986 E COUNTRY SHADOWS Street, Gilbert AZ, 85298

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4 beds, 3 baths
Home size: 3,064 sq ft
Lot Size: 7,840 sq ft
Added: 01/31/18, Last Updated: 02/20/18
Property Type: Single Family
MLS Number: 5716695
Community: COUNTRY SHADOWS
Tract: COUNTRY SHADOWS
Status: Conditional


This beautiful 4bedroom plus loft, 3 bath home has had fresh interior paint and is move in ready! With over 3000 square feet, you get a ton of space in this home, both in the living and storage areas. The kitchen features expansive maple cherry cabinets, granite countertops, black appliances and large island that overlooks the great room. For additional entertaining space there is a formal living and dining room downstairs. Upstairs you will find the master bedroom and 3 secondary bedrooms plus a large loft. The master bedroom features separate tub and shower, dual vanities sinks with his and hers closets. Home has a nice sized backyard with gorgeous mountain views and is a blank canvas ready for your dream pool and entertaining space. Close to all the amenities Seville has to offer!

Listed with Mosaic 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/!


$360,000 :: 1282 E Parkview Drive, Gilbert AZ, 85295

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5 beds, 2.5 baths
Home size: 2,824 sq ft
Lot Size: 7,405 sq ft
Added: 12/02/17, Last Updated: 02/20/18
Property Type: Single Family
MLS Number: 5694316
Community: Spectrum at Val Vista
Tract: Spectrum at Val Vista
The price of this listing was last reduced on 2/8/2018 by 1%
Status: Active


Gorgeous 5 bedroom 3 bath home in one of Gilbert's best neighborhoods! The gorgeous kitchen has been updated with white cabinets, granite counters, stainless steel appliances, & island trimmed out with custom shiplap woodworking. Upstairs linen closet is finished with custom white barnstyle doors. All bedrooms are very spacious & one has a built-in loft style bunk beds the kids will love! This immaculate home has been freshly painted inside & out. Seller will consider allowance for more cosmetic upgrades of buyer's choice with a great offer - MOTIVATED SELLER!!! You will enjoy the large front porch, which is so rare. Go Green with SOLAR POWER-offsetting about 75% of the electricity with an avg monthly bill of only $165! There is also a huge tandem 3 car garage perfect for man cave or shop.

Listed with Keller Williams Realty Phoenix


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


$289,999 :: 2841 E La Costa Drive, Chandler AZ, 85249

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4 beds, 2 baths
Home size: 1,842 sq ft
Lot Size: 6,969 sq ft
Added: 02/20/18, Last Updated: 02/20/18
Property Type: Single Family
MLS Number: 5725843
Community: COOPER COMMONS 3 PARCEL 9
Tract: COOPER COMMONS 3 PARCEL 9
Status: Active


Welcome home to this beautifully maintained single level corner lot home in highly sought after Cooper Commons. Newly professionaly painted in and out! Your new home features a large kitchen with huge island, real wood cabinetry and pantry for extra storage, 4 spacious bedrooms and 2 full bathrooms. Open and bright concept, vaulted ceilings. The spacious spa inspired master bath features dual sinks, hand laid tiled back splash, tiled soaking tub and tiled shower surrounds with large walk-in closet. Your new outdoor living space is a perfect area to relax after a long day of work or play that features a large sparkling pebble-tec pool. Spanish inspired tiled and brick paver sitting areas and covered patio. Only one owner that has been exceptionally maintained. Won't last long!

Listed with UCI Realty, L.L.C.


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


$257,300 :: 2020 E CHICAGO Street, Chandler AZ, 85225

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3 beds, 2 baths
Home size: 1,060 sq ft
Lot Size: 7,405 sq ft
Added: 02/20/18, Last Updated: 02/20/18
Property Type: Single Family
MLS Number: 5725845
Community: COLONIA CORONITA UNIT 3
Tract: COLONIA CORONITA UNIT 3
Status: Active


3 bedroom/2 bath home in Colonia Coronita on large lot. Conveniently located near Loop 202. Home features North/South exposure, RV gate, covered patio, 2 storage sheds, garage parking, split floor plan, ceiling fans, brick fireplace and dual pane windows. This home has been remodeled from top to bottom and features a brand new roof, new flooring, new modern granite counters and stainless steel appliances. This remarkable property is available for immediate sale. The seller is very responsive and the property is a perfect opportunity for all buyer types.

Listed with American Allstar 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/!


$349,900 :: 3410 E LAFAYETTE Avenue, Gilbert AZ, 85298

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5 beds, 4 baths
Home size: 2,529 sq ft
Lot Size: 6,098 sq ft
Added: 01/26/18, Last Updated: 02/20/18
Property Type: Single Family
MLS Number: 5715120
Community: SEVILLE PARCEL 23
Tract: SEVILLE PARCEL 23
Status: Conditional


Your search is over! This beautifully upgraded home is certain to impress even the pickiest buyer.Check out the 3D virtual tour under the ''photo'' tab. 5 bedroom, 4 bathroom, 2,529sf home w/ plantation shutters throughout. There are 3 bedrooms on the upper floor including a large master suite w/ gorgeous ledge stone accent wall and dark hardwood flooring. The master bathroom boasts custom granite counter-tops. Walk-in closet, separate tub/shower and lots of natural light The other two bedrooms share a jack and Jill bathroom w/ separated shower. There is also an open loft on the 2nd floor which is perfect for a private movie/gaming area. The travertine accent wall adds to the cozy feeling of this space

Listed with Desert Ridge Realty Professionals


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


$448,000 :: 1350 N LOS FELIZ Drive, Chandler AZ, 85226

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4 beds, 2 baths
Home size: 2,540 sq ft
Lot Size: 11,325 sq ft
Added: 01/20/18, Last Updated: 02/20/18
Property Type: Single Family
MLS Number: 5712055
Community: PARKSIDE ESTATES
Tract: PARKSIDE ESTATES
The price of this listing was last reduced on 1/20/2018 by 0%
Status: Active


Oversized lot, shade trees, big diving/play pool. New iron front door, New sand filter for pool. Freshly painted exterior and some interior. Large covered patio. New epoxy flooring in garage. Garage cabinets, laundry cabinets. Cabinets in one of the bedroom closets. Updated in the last few years: heat pumps, lighting, flooring, granite counters and backsplash in kitchen. Kitchen opens to family rm with breakfast bar, xtra lighting and crown molding in family rm. Formal dining rm plus separate formal living room. Hand scraped wood floors in living rm. Taupe and tan color scheme. Grass front and back. 3 car garage, fireplace in family room. french doors from master to back yard & from family room to back yd. Phantom screens at both french doors. Pull down stairway to attic. Soft water + R/O

Listed with Dana Hubbell 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/!