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

$495,000 :: 654 W BARTLETT Way, Chandler AZ, 85248

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3 beds, 2.5 baths
Home size: 2,428 sq ft
Lot Size: 8,712 sq ft
Added: 11/25/17, Last Updated: 12/13/17
Property Type: Single Family
MLS Number: 5691696
Community: FULTON RANCH
Tract: FULTON RANCH
The price of this listing was last reduced on 11/25/2017 by 1%
Status: Active


UPGRADED Single Level in FULTON RANCH. 3 Bedrooms/2.5 Bathrooms + Den. Kitchen features Granite Counters, Cherry Cabinets, SS Appliances, Gas range, Island & large walk-in Pantry. No Carpet! Tile & Hardwood floors. Plantation Shutters. Formal Living/Dining Room with Crown Moulding. Split Master Retreat & private Bathroom w/soaking tub & step-in shower. Extended Travertine Patio w/Gas Fire pit, Sunning deck, shade Ramada & BBQ Gas Stub. Remote controlled Misting System. 3 Car Extended Garage w/attached cabinets & epoxy floors. Soft H2O, R/O System, Surround Sound. Popular Chandler community w/lakes, walking paths, green belts, playgrounds. Near Fulton Elementary School, Snedigar Park, shopping, dining, Ocotillo Golf Club & easy commute to Intel, Orbital & Price Road employers. See it Today!

Listed with Keller Williams Legacy One


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


$225,000 :: 1515 W EL MONTE Place, Chandler AZ, 85224

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3 beds, 2 baths
Home size: 1,446 sq ft
Lot Size: 7,405 sq ft
Added: 11/13/17, Last Updated: 12/13/17
Property Type: Single Family
MLS Number: 5687309
Community: COLLEGE PARK 19 LOT 242-327 32
Tract: COLLEGE PARK 19 LOT 242-327 32
The price of this listing was last reduced on 12/1/2017 by 4%
Status: Active


Great opportunity to own this beautiful 3 bed, 2 bath property for sale located in Chandler! Featuring 2 car garage, gravel front landscaping, cozy fireplace, and neutral paint throughout. This fabulous interior offers a well maintained kitchen complete with matching appliances, recessed lighting, breakfast bar, ample cabinetry, and a pantry. Inside the spacious master bedroom you will find a lavish full bath and closet. Gorgeous backyard is also comprised of a grassy landscaping, covered patio, and sitting area perfect for entertaining. This is the one you have been waiting for. Hurry to see this property today!

Listed with The Real Estate Firm


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


$419,000 :: 127 E CANYON Way, Chandler AZ, 85249

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5 beds, 3 baths
Home size: 2,721 sq ft
Lot Size: 4,791 sq ft
Added: 11/08/17, Last Updated: 12/13/17
Property Type: Single Family
MLS Number: 5685230
Community: RESERVE AT FULTON RANCH
Tract: RESERVE AT FULTON RANCH
The price of this listing was last reduced on 11/15/2017 by 0%
Status: Active


This beautiful home in Chandler boasts 5 bedrooms and 3 bathrooms on 2 levels with over 2,700 sq. ft. of space! The kitchen is a cook's paradise with stainless steel appliances, lots of granite countertops, and plenty of cabinet space. It opens to the family room for great entertaining! The master bedroom is downstairs and split from the 2nd downstairs bedroom. The 2nd level provides another living space with an amazing covered balcony. 2 of the 3 bedrooms upstairs have walk-in closets and share the hallway bathroom. This home has easy access to the 202 and won't last long. A must see!

Listed with Noma Group 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/!


$438,500 :: 869 E LOMA VISTA Street, Gilbert AZ, 85295

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4 beds, 2 baths
Home size: 2,600 sq ft
Lot Size: 16,117 sq ft
Added: 12/06/17, Last Updated: 12/13/17
Property Type: Single Family
MLS Number: 5695650
Community: SERRANO REPLAT
Tract: SERRANO REPLAT
The price of this listing was last reduced on 12/6/2017 by 0%
Status: Active


Come see this beautiful, single story, 4 bedroom home on an oversized lot of 16,067sq.ft. and perfectly located in the highly desired town of Gilbert! Resort style & very private backyard (new in 2015 over $75K) includes a real outdoor fireplace, built in BBQ with burners & drink cooler, outdoor TV & Speakers, travertine decking, custom lighting, commercial grade misting system, and a HUGE side yard cement slab (30ftX50ft) with a super wide 12ft RV gate! Split floor plan. Surround sound throughout the home. All 3 mounted TV's, subwoofer, & sound system equipment to convey with the sale! East side AC unit brand new in 2016. Sunscreens on all windows. Wood laminate flooring installed in 2014. Spacious kitchen with center island opens up to a large great room!

Listed with Realty Executives


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


$369,000 :: 2074 E ZION Way, Chandler AZ, 85249

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4 beds, 3 baths
Home size: 2,762 sq ft
Lot Size: 15,245 sq ft
Added: 11/09/17, Last Updated: 12/13/17
Property Type: Single Family
MLS Number: 5686067
Community: COOPER CORNERS EAST
Tract: COOPER CORNERS EAST
Status: Active


Short Sale opportunity with this amazing 4 bedroom 3 bath home in Chandler! VERY spacious with large open kitchen/great room, eat in kitchen, formal dining room, open den for a home office, one bedroom downstairs, upstairs loft and another separate nook that could also be an office or play room for the kids! Inviting sizable master suite with separate tub and shower, dual sinks and walk-in closet. 3 car garage. Tons of storage space everywhere. And to top it all off... 1/3 of an acre backyard oasis with a covered patio for you to relax under, or enjoy the pool & spa while the kids and dogs run and play for hours! This one won't last long so make sure you schedule a showing today!

Listed with My Home Group Real Estate, 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/!


$264,999 :: 2323 E MANOR Drive, Gilbert AZ, 85296

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3 beds, 2 baths
Home size: 1,353 sq ft
Lot Size: 6,969 sq ft
Added: 12/13/17, Last Updated: 12/13/17
Property Type: Single Family
MLS Number: 5698091
Community: MANOR AT FINLEY FARMS UNIT 1
Tract: MANOR AT FINLEY FARMS UNIT 1
Status: Active


Gorgeous home sweet home in Gilbert! Soaring ceilings and custom wood floors throughout. Eat in kitchen is complete with a plethora of cabinets, ample counter space, and black appliances. Master suite has private exit to backyard and a ceiling fan. Full bathroom with room for dual sink vanity. Spacious walk in closet! Built in heavy duty Oak bar makes for a great home to entertain your guests! Backyard features an extended covered patio with sparkling pool and plenty of room for entertaining. North/South exposure and no immediate neighbors behind. Priced to sell and wont last in long in this highly desired area. Hurry and see it today!

Listed with KD Realty, 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/!


$424,500 :: 486 S Red Rock Street, Gilbert AZ, 85296

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4 beds, 3.5 baths
Home size: 3,292 sq ft
Lot Size: 9,583 sq ft
Added: 06/24/17, Last Updated: 12/13/17
Property Type: Single Family
MLS Number: 5624443
Community: Silverstone Ranch
Tract: Silverstone Ranch
The price of this listing was last reduced on 11/15/2017 by 0%
Status: Active


Welcome to the Ranch at Silverstone! An equestrian lifestyle community! This beauty FEATURES, Boarding Stables for up to two horses incl in HOA!! Classic Travertine Tile (throughout except stairs/hall/bedrooms., Gas fireplace, TWO huge Master bdrm/ba. One Newly remodeled with over $50k in upgrades! Other master has an enormous sitting room. Bedroom 3 and 4 are oversized with Walk in Closets! Newly refinished Diving lap pool/spa, gas fire pit. 3 Car Garage, RV gate and oversized yard. Home backs to greenbelt/park/ramada and tot lot. Fry's on same corner, Target and Starbucks on opposite corner! This home is extremely clean and move in ready! A MUST SEE HOME AND COMMUNITY!

Listed with HomeSmart


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


$249,900 :: 3293 E LOMA VISTA Street, Gilbert AZ, 85295

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3 beds, 2.5 baths
Home size: 1,884 sq ft
Lot Size: 3,049 sq ft
Added: 12/13/17, Last Updated: 12/13/17
Property Type: Single Family
MLS Number: 5698070
Community: LYONS GATE PHASE 5
Tract: LYONS GATE PHASE 5
Status: Active


Your search is over! Fantastic Gilbert home on a Cul de Sac lot! Close to shopping, dining, and easy freeway access! Meticulously kept interior offers an open floor plan with a neutral color palette throughout. Roomy kitchen boasts custom cabinetry, ample counter space, and a large pantry. 3 spacious bedrooms + den with plush carpeting! Master has an adjoining bath and walk in closet. Relax in the serene backyard with a pergola style covered patio, lush green grass, and low care flora! This home is sure to go quick! Make it your first and last stop!

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/!


$275,000 :: 4069 E WRANGLER Court, Gilbert AZ, 85297

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4 beds, 3 baths
Home size: 2,203 sq ft
Lot Size: 6,534 sq ft
Added: 12/13/17, Last Updated: 12/13/17
Property Type: Single Family
MLS Number: 5698068
Community: POWER RANCH NEIGHBORHOOD 2
Tract: POWER RANCH NEIGHBORHOOD 2
Status: Active


Great home located in the Award-Winning neighborhood of Power Ranch!! Soaring ceilings and a formal living and dining room welcome you into the home. The open-concept main living area is great for entertaining and features a stone fireplace. Open eat-in kitchen offers an island, pantry, and Corian countertops. Conveniently located downstairs is a full bedroom and bathroom. Upstairs offer a split floor plan. Spacious master bedroom leads to the master bathroom with separate shower and tub, double sinks at the vanity, and walk-in closet. Down the hall are 2 more bedrooms, a full bathroom, and convenient upstairs laundry room. Large backyard features a covered patio and beautiful yard. Great investment opportunity!

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/!


$535,000 :: 3769 E LIBRA Place, Chandler AZ, 85249

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8 beds, 4 baths
Home size: 4,935 sq ft
Lot Size: 15,245 sq ft
Added: 11/22/17, Last Updated: 12/13/17
Property Type: Single Family
MLS Number: 5691219
Community: SHADOW RIDGE
Tract: SHADOW RIDGE
The price of this listing was last reduced on 12/5/2017 by 3%
Status: Active


Home Sweet Basement Home! This 8-bedroom home is gorgeous AND it is on the largest lot in the subdivision...over 15,000 square feet! The immense island kitchen flows into the family room making it perfect for family and entertaining. The kitchen boasts granite counters, double ovens and a plethora of cabinets. Beautiful tile, wood laminate and neutral carpet highlight this home's flooring. The split master suite boasts separate vanities and walk-in closets. The basement has 2 bedrooms, a full bath and living area. There's also a loft upstairs and home theater room on the main level. The 3rd bay of the garage features a rear garage door so that vehicles can be pulled thru to a 4-car parking slab. The backyard is HUGE with sport court, heated Pebble Tek pool, built-in BBQ and lots of grass!

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/!