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

$369,899 :: 3128 E FRANKLIN Avenue, Gilbert AZ, 85295

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5 beds, 3 baths
Home size: 3,062 sq ft
Lot Size: 4,791 sq ft
Added: 04/25/17, Last Updated: 06/24/17
Property Type: Single Family
MLS Number: 5595534
Community: Lyons Gate
Tract: Lyons Gate
The price of this listing was last reduced on 6/9/2017 by 0%
Status: Active


PERFECT LOCATION! This 2013 Built Energy Efficient Meritage Home w/ Very Functional Open-Concept Floor Plan has Full Bed/Bath Downstairs. This 5 BR/3 BTH has 100% OWNED SOLAR, in the Highly Sought After Area of Gilbert, AZ & Lyons Gate Community. Located Adjacent To a Large Community Park, Close to San Tan Mall, Downtown Gilbert & 202 Freeway. A Cosy Backyard w/ Hot Tub, Patio Pavers, & Built-in Fire Pit. Upgrades Everywhere! A Fully Upgraded Kitchen, Tall Cabinets, Granite Counters, Large Seated Kitchen Island, Built in wet bar, Large Loft,Wood Shutters,Stainless Appliances, Wood & Ceramic Tile, Soft Water, RO Water System,3 Car Tandem Garage with Smart Car Plug-In, To Name a Few. This Home Has Tons of Storage and Common Area. Many Community Parks, Rec Center,3 Community Pools

Listed with Revelation Real Estate


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


$285,000 :: 1341 N JAMAICA Way, Gilbert AZ, 85234

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3 beds, 0 baths
Home size: 1,901 sq ft
Lot Size: 5,227 sq ft
Added: 06/24/17, Last Updated: 06/24/17
Property Type: Single Family
MLS Number: 5624377
Community: LANDING AT VAL VISTA LAKES LT
Tract: LANDING AT VAL VISTA LAKES LT
Status: Active


Prestigious Val Vista Lake home in great shape with upgraded kitchen and bathrooms which is hard to find. Making your way in this gorgeous home is a large open vaulted living room and dining room. Open kitchen overlooks a large family room with a fireplace and designer 18" neutral tile flooring and is great for entertaining. Kitchen shows lots of raised panel professionally painted cabinets, upgraded counted tops, all upgraded stainless steel appliances, refrigerator stays, upgraded faucet, designer lighting, pantry and office area. Upgraded 18" neutral tile flooring in entry, hall, kitchen, family room, laundry and all bathrooms. Large vaulted master bedroom and master bathroom has a spa like glass doors, tiled walls and flooring, upgraded double sinks, faucet and walk-in closet.

Listed with ProSmart 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/!


$148,900 :: 1825 W RAY Road #2030, Chandler AZ, 85224

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1 bed, 1 bath
Home size: 597 sq ft
Lot Size: 871 sq ft
Added: 06/24/17, Last Updated: 06/24/17
Property Type: Single Family
MLS Number: 5624380
Community: LAKESHORE AT ANDERSEN SPRINGS
Tract: LAKESHORE AT ANDERSEN SPRINGS
Status: Active


Amazing property for sale in Chandler! This fabulous condo offers an open floor plan & completely updated interior. FULL 3D INTERIOR WALKTHROUGH - CLICK VIRTUAL TOUR! Gorgeous kitchen is equipped with stainless steel appliances, white cabinetry, granite countertops, Reverse osmosis water filtration, and pantry. The bedroom features a private balcony exit & a spacious walk-in closet. The lavish bath has granite countertops & tile backsplash. A/C replaced in 2015 with a 13 year transferrable warranty! Community amenities include resort style pool, Ramada, BBQ's, club house, tennis court, and assigned parking.

Listed with RE/MAX-Preferred Choice


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


$250,000 :: 1238 E CHICAGO Circle, Chandler AZ, 85225

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3 beds, 2 baths
Home size: 1,597 sq ft
Lot Size: 4,791 sq ft
Added: 06/23/17, Last Updated: 06/24/17
Property Type: Single Family
MLS Number: 5624349
Community: SPRINGS UNIT 2 AMD LOT 30-213
Tract: SPRINGS UNIT 2 AMD LOT 30-213
Status: Active


Welcome home! Just waiting for you is this spacious 3 bedroom, 2 bathroom home on the water. The formal living and dining rooms greet you the minute you walk inside. Great view of the water from the Family room, kitchen and master bedroom. Your kitchen features an island and eat-in kitchen and is open to family room. Enjoy the fireplace in the winter. Master bathroom features double sinks, separate tub and shower. Walk-in closet in master bedroom. Interior and exterior of the home just painted on 6/21/17. Priced to sell quickly. Enjoy the great location and Springs amenities, from tennis courts, rec center, community pool and more. Hurry this cute home on the water won't last long.

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/!


$310,000 :: 3990 E Los Altos Drive, Gilbert AZ, 85297

5 beds, 3 baths
Home size: 2,327 sq ft
Lot Size: 6,098 sq ft
Added: 06/24/17, Last Updated: 06/24/17
Property Type: Single Family
MLS Number: 5624388
Community: POWER RANCH NEIGHBORHOOD 10 PA
Tract: POWER RANCH NEIGHBORHOOD 10 PA
Status: Active


Welcome Home to Award Winning Power Ranch! Turn key home with soaring ceilings, neutral color palette, upgraded lighting, plush carpet, & beautiful tile in all the right places. Sweeping stairway to second level overlooking the living room. Light & bright eat-in kitchen features center island, breakfast bar, pantry, stylish counters, SS appliances, r/o, insta-hot water & upgraded cabinetry with crown molding. Bedroom with hardwood floor & full bath on first level. Sunny picture window showcases the backyard view from the great room. Enjoy the lush backyard with covered patio, mature orange & lemon trees, & garden area complete with large side yard & RV gate. Power Ranch has 26+ miles of trails, BB & VB courts, tot lots, 3 pools, splash pad, 2 lakes, 2 clubhouses & Trilogy golf course.

Listed with Call Realty, Inc.


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


$310,000 :: 1483 W KESLER Lane, Chandler AZ, 85224

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4 beds, 3 baths
Home size: 2,144 sq ft
Lot Size: 6,969 sq ft
Added: 06/23/17, Last Updated: 06/24/17
Property Type: Single Family
MLS Number: 5624341
Community: BLAKEMAN RANCH UNIT 1
Tract: BLAKEMAN RANCH UNIT 1
Status: Active


Great Chandler property in Blakeman Ranch! This home is in wonderful condition and just needs a new owner. Newer Kitchen cabinets, Granite counter tops, SS appliances, upgraded carpet just to name a few. This 2,144 SF 2 story home features 4 large bedrooms and 3 full baths, open kitchen with eat-in area, formal dining room and living room. Vaulted ceiling makes it feel even larger. The N/S setting keeps this home warm in the winter and cool in the summer. Bring your toys and come thru the huge RV gate on the side yard. The full cover patio has had all the columns wrapped with beautiful designer brick . Plenty of room for a pool if desired. Close to great schools, shopping and freeways this is a must see home. Don't miss out!

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/!


$417,900 :: 842 E HORSESHOE Place, Chandler AZ, 85249

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3 beds, 0 baths
Home size: 2,482 sq ft
Lot Size: 8,276 sq ft
Added: 06/23/17, Last Updated: 06/24/17
Property Type: Single Family
MLS Number: 5624325
Community: OCOTILLO LANDING
Tract: OCOTILLO LANDING
Status: Active


Why build when you can buy a home that is like new & move-in-ready? Located in a cul-de-sac in prime GATED Chandler neighborhood of Ocotillo Landing, this K-HOV open floorplan is warm & welcoming for entertaining. The spacious gourmet kitchen features a 5-burner GAS cooktop,walk in pantry, granite countertops and 12' kitchen island to make this kitchen a chef's dream!Additional features include expansive great room and dining area with soaring ceilings, neutral paint colors throughout and tile flooring in all the right places with carpet in the bedrooms. The split master bedroom retreat offers custom tile accents walk-in shower, separate garden tub and massive walk in closet! Don't miss your chance to own this highly sought-after plan, situated in a beautiful, private gated community!

Listed with Revelation Real Estate


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


$297,500 :: 4610 E KARSTEN Drive, Chandler AZ, 85249

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3 beds, 2 baths
Home size: 1,926 sq ft
Lot Size: 8,276 sq ft
Added: 06/23/17, Last Updated: 06/24/17
Property Type: Single Family
MLS Number: 5624316
Community: SUN GROVES PARCEL 6 & 7
Tract: SUN GROVES PARCEL 6 & 7
Status: Active


Beautiful move in ready 3 bedroom, 2 bathroom home in Sun Groves. This spacious floor plan has both formal living room and family room with a gorgeous corner fireplace as well as vaulted ceilings throughout. The upgraded kitchen boasts granite countertops, big island, stainless steel appliances and a walk in pantry. The split master features double sinks, separate shower and tub, private toilet room and massive walk in closet. The back yard oasis has mature trees, grassy area with two patios and a gorgeous beehive fireplace with seating surround and views of the San Tan Mountains. This home will not last!

Listed with Revelation Real Estate


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


$299,997 :: 4207 E VAUGHN Avenue, Gilbert AZ, 85234

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3 beds, 2 baths
Home size: 1,861 sq ft
Lot Size: 6,534 sq ft
Added: 06/23/17, Last Updated: 06/24/17
Property Type: Single Family
MLS Number: 5624340
Community: HIGHLAND GROVES AT MORRISON RA
Tract: HIGHLAND GROVES AT MORRISON RA
Status: Active


Located in beautiful Highland Groves of Morrison Ranch. Right in the middle of an amazing Master Planned Community that prides itself with its amazing green belts and open spaces. This home is right next to a lush Green Belt and two short blocks to the Community Lakes, Playground and Bbq Area. this beautiful Ashton Woods home with upgrades throughout. 18' Tile flooring in Kitchen and Main Living Area and Beautiful Upgraded Stone Fireplace. Upgraded Kitchen Cabinets with Bubble Glass Panels. new carpet, Fresh paint, epoxy garage floor Energy Star Rated Stainless Steel Kitchen Appliances. Wood Faux Blinds throughout home. Formal Dining Room! This is a great home in a great neighborhood! A must see home and a great value!

Listed with Realty ONE 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/!


$279,000 :: 3674 S JOSHUA TREE Lane, Gilbert AZ, 85297

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4 beds, 2 baths
Home size: 1,656 sq ft
Lot Size: 6,098 sq ft
Added: 06/23/17, Last Updated: 06/24/17
Property Type: Single Family
MLS Number: 5624329
Community: SAN TAN RANCH PARCEL 13
Tract: SAN TAN RANCH PARCEL 13
Status: Active


Check out this beautiful 1,656 square foot 4 bed/2 bath home. Fourth bedroom can be bedroom or den. Tile flooring throughout family and living room, includes gorgeous 16-point in-laid star. Kitchen has tile counter tops and back splash. Pebble tech pool with fencing. Close to San Tan Mall, 202 San Tan Freeway, Higley High School, and Mesa-Gateway Airport.

Listed with Visionary 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/!