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

$569,900 :: 745 E COUNTY DOWN Drive, Chandler AZ, 85249

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4 beds, 3.5 baths
Home size: 3,599 sq ft
Lot Size: 16,117 sq ft
Added: 05/27/18, Last Updated: 05/27/18
Property Type: Single Family
MLS Number: 5772069
Community: FIELDSTONE ESTATES
Tract: FIELDSTONE ESTATES
Status: Active


Nestled within sought after Fieldstone Estates on a manicured 1/3+ acre, private, N/S facing lot adjacent from one of several vast community greenbelts, this 4 BR, 3.5 BTH w/3 CG stunner boasts a spacious, open floor plan w/kitchen opening into great room, separate study w/built-ins, formal living & formal dining space offering loads of natural light, architectural details, upgraded accessories, tile in all the right places, plantation shutters, surround sound, double-sided fireplace. Gourmet kitchen features spacious granite counters & backsplashes accented by gorgeous cherry cabinets, walk-in pantry, matching stainless GE Profile appliances; incl. gas cook top & wall mounted double ovens, huge island w/breakfast bar. The generous master suite comes with...

Listed with Century 21 Arizona Foothills


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


$368,990 :: 4566 S MCCLELLAND Drive, Chandler AZ, 85248

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3 beds, 2.5 baths
Home size: 2,441 sq ft
Lot Size: 2,613 sq ft
Added: 11/28/17, Last Updated: 05/27/18
Property Type: Single Family
MLS Number: 5692635
Community: PARKVIEW PLACE
Tract: PARKVIEW PLACE
The price of this listing was last reduced on 5/27/2018 by 0%
Status: Active


New Construction! Move in ready! Our best selling floor plan featuring 3 Bedrooms, 2.5 Baths PLUS Loft and 2 Car Garage on corner lot near the park! Stainless steel appliances, upgraded Silestone kitchen countertops, ''Glacier'' painted cabinets, 8ft interior doors, ceiling fan pre-wires at all bedrooms, designer faux wood look tile, upgraded carpet/pad in bedrooms, white subway tile surrounds in master bath, upgraded light & plumbing fixtures, & so much more! At Parkview Place, contemporary, low maintenance living meets exceptional design & innovation. This exclusive, private gated community is nestled in between the highly desirable Ocotillo and Fulton Ranch area of Chandler, adjacent to Snedigar Park & offers rear-entry garages, private side-yards & a community pool.

Listed with Arizona Best 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/!


$278,000 :: 1641 N Cholla Street, Chandler AZ, 85224

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3 beds, 2 baths
Home size: 1,541 sq ft
Lot Size: 7,405 sq ft
Added: 05/27/18, Last Updated: 05/27/18
Property Type: Single Family
MLS Number: 5772047
Community: KNOELL EAST UNIT 7
Tract: KNOELL EAST UNIT 7
Status: Active


Beautiful 3 bedroom/2 bath ranch home in desirable Knoell East! Located on a quiet interior lot, this well-maintained and completely updated home boasts updated tile flooring through the living areas with cozy wood flooring in bedrooms, remodeled bathrooms with gorgeous granite and finishing touches, and a completely updated Kitchen including new cabinets(with extra in the dining area!), counters,& tile backsplash! Cozy brick wood burning fireplace in the family room! Vaulted ceilings make this home bright and open, providing for many custom built ins! Expanded indoor laundry room has plenty of extra storage with added cabinets! Oversized low maintenance backyard with an extended covered patio, 2 storage sheds, and paved RV space!Expanded front parking AND 2 car garage w/ cabinets!

Listed with Berkshire Hathaway HomeServices Arizona 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/!


$374,900 :: 2856 E CHERRYWOOD Place, Chandler AZ, 85249

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3 beds, 2 baths
Home size: 2,512 sq ft
Lot Size: 13,503 sq ft
Added: 05/15/18, Last Updated: 05/27/18
Property Type: Single Family
MLS Number: 5766626
Community: RIGGS RANCH MEADOWS
Tract: RIGGS RANCH MEADOWS
The price of this listing was last reduced on 5/27/2018 by 4%
Status: Active


Beautiful Semi-Custom 2x6 home on 1/3 acre. Check out the comps on this street, neighborhood homes sold $500k+ Courtyard entryway w/detached 3rd Car Gar/poss.Casita. 10'ceilings, Large kitchen with custom cabinets and built in pullout shelves/lower cabinets, upgraded appliances, Granite countertops. Large pantry. Large master bedroom, bath and closet. Glass Block windows in master bath, ceiling fans with lights throughout. New nuetral interior paint and new carpeting. On Cul de sac street excellent for families with playing children. Backyard features a firepit, brick patio, and outdoor kitchen for guest entertaining. New exterior paint 12/2013. Low-E windows 2013. Well maintained,quality and pride shows. Seller Financing is Available. Owner is Arizona licensed real estate agent

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/!


$355,000 :: 4554 E RUNAWAY BAY Drive, Chandler AZ, 85249

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4 beds, 2 baths
Home size: 2,309 sq ft
Lot Size: 9,583 sq ft
Added: 05/15/18, Last Updated: 05/27/18
Property Type: Single Family
MLS Number: 5766256
Community: SUN GROVES PARCEL 6 & 7
Tract: SUN GROVES PARCEL 6 & 7
The price of this listing was last reduced on 5/27/2018 by 1%
Status: Active


Brand new kitchen appliances and kitchen sink/faucet, fresh interior and exterior paint, new carpet in three bedrooms and den, laminate flooring in large Master bedroom with ensuite bath, new landscaping rock, resurfaced/renovated swimming pool with new pool pump. Additional Information: Water Softener and Reverse Osmosis Drinking system installed. Sun/Privacy Shades on windows, has a storage shed in back yard and RV Gate. Sun Groves Housing Community has many green areas and parks. Located one block from Navarette Elementary and Basha HS is across the street.

Listed with Congress 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/!


$282,500 :: 4010 E SUNDANCE Court, Gilbert AZ, 85297

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3 beds, 2 baths
Home size: 1,605 sq ft
Lot Size: 8,712 sq ft
Added: 04/21/18, Last Updated: 05/27/18
Property Type: Single Family
MLS Number: 5755224
Community: POWER RANCH NEIGHBORHOOD 4
Tract: POWER RANCH NEIGHBORHOOD 4
The price of this listing was last reduced on 5/27/2018 by 0%
Status: Active


Imagine coming home to this charming 3 bed, 2 bath property centered in the heart of Gilbert. This single story home features a grassy front landscaping, 2 cargarage, living/dining area, designer paint tones throughout. Well maintained kitchen is complete with matching stainless steel appliances, recessed lighting, andample cabinet/counter space. Beautiful Oak cabinets redone. Genuine master suite includes a lavish full bath with separate tub and step-in shower. Large backyard is comprised of a beautifulgrassy landscaping, covered patio, and paved sitting area great for relaxing afternoons. Living room and dining room just painted a neutral color. Fresh exterior paint, private backyard, and a attic. Dont wait any longer to come and enjoy your new family house.Schedule NOW!

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/!


$550,000 :: 4084 E RAVENSWOOD Drive, Gilbert AZ, 85298

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4 beds, 2.5 baths
Home size: 2,925 sq ft
Lot Size: 19,602 sq ft
Added: 05/27/18, Last Updated: 05/27/18
Property Type: Single Family
MLS Number: 5772042
Community: Seville
Tract: Seville
Status: Active


Elegant single level home on rare .5 acre lot in prestigious Seville Country Club with Private pool. 3Bedrm plus Den Office (4th Bdrm) plus materbedrm retreat Room. Spacious floor plan, including 2 large secondary bedrooms and convenient tech room/den. Granite counter tops in kitchen with maple cabinets, and gas range all open to large family room with gas fireplace. Beautiful lap pool with waterfall and fiber=optic lighting. Extended 3 car garage!!

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/!


$377,950 :: 4641 E KARSTEN Drive, Chandler AZ, 85249

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5 beds, 2.5 baths
Home size: 3,088 sq ft
Lot Size: 8,712 sq ft
Added: 05/24/18, Last Updated: 05/27/18
Property Type: Single Family
MLS Number: 5770965
Community: SUN GROVES PARCEL 6 & 7
Tract: SUN GROVES PARCEL 6 & 7
Status: Conditional


This beauty is an entertainer's dream! Nestled in the highly desirable neighborhood of Sun Groves, this home features a gorgeous kitchen with loads of cabinets, granite countertops, walk-in pantry, and a large island. There is one bedroom downstairs and upstairs you will find a huge master suite, three oversized bedrooms (all with walk-in closets), AND a loft. Enjoy the resort-style backyard which boasts a covered patio, heated pool, spa, putting green, fire pit, and built-in BBQ. A must see!

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/!


$340,000 :: 728 N BRIDLEGATE Drive, Gilbert AZ, 85234

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3 beds, 2 baths
Home size: 2,136 sq ft
Lot Size: 7,405 sq ft
Added: 04/18/18, Last Updated: 05/26/18
Property Type: Single Family
MLS Number: 5753734
Community: EL DORADO AT THE HIGHLANDS
Tract: EL DORADO AT THE HIGHLANDS
Status: Conditional


Enjoy the southwestern lifestyle in this Gilbert home! The backyard with heated pebble tech pool and spa is made for outdoor living! Pick fresh, delicious peaches, figs, and oranges in your own yard. Gather round the fire pit on a cold night.This 3 bedroom + den, 2 bathroom, 3 car garage house with 2136 square feet has vaulted ceilings and an open floor plan. Open kitchen with 42 inch cabinets, stainless steel appliances, corian countertops, and island. Double oven gas range with lower convection oven. The spacious master bedroom is split from the other two bedrooms. Living room includes electric fireplace and surround sound speakers. Security doors on front and back doors. The tankless water heater will help lower your utility bills.

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/!


$649,000 :: 464 W AZALEA Drive, Chandler AZ, 85248

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5 beds, 4.5 baths
Home size: 4,126 sq ft
Lot Size: 10,018 sq ft
Added: 05/26/18, Last Updated: 05/26/18
Property Type: Single Family
MLS Number: 5771977
Community: AVALON AT DOBSON CROSSING
Tract: AVALON AT DOBSON CROSSING
Status: Active


This is It! $250,000+ in PREMIUM UPGRADES & finishes! Move-In Ready! Open Greatroom floorplan + Guest Suite + office/den + Huge Basement w/wet bar, fridge! Gourmet Kitchen w/stainless steel 48' Monogram Fridge, 5 Burner Gas Stove, Granite countertops, Staggered custom cabinetry w/Crown Molding, Huge Island & Pantry! Very Customized Master Closet, Epoxied garage w/expensive Stainless Steel cabinets, RV gate too! Amazing Yard w/ Sparkling XXL Diving Pool, Spa, Fully finished Gazebo w/ Power, lights & Cable TV! Almost 1/4 acre private corner N/S facing lot & Park right next door! Very short walk to Basha Elementary or Hamilton High (No need to buy your teen a car!) Way too many features to list here, but it sure will impress the most discriminating buyer! Call Now to see It in person!

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/!