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

$184,900 :: 727 S HARTFORD Street #219, Chandler AZ, 85225

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3 beds, 2 baths
Home size: 1,116 sq ft
Lot Size: 1,306 sq ft
Added: 07/26/17, Last Updated: 08/16/17
Property Type: Single Family
MLS Number: 5637927
Community: SOUTHRIDGE ESTATES
Tract: SOUTHRIDGE ESTATES
The price of this listing was last increased on 8/2/2017 by 3%
Status: Active


Great opportunity to own this gorgeous 3 bed, 2 bath property for sale located in Chandler. Featuring a grassy front landscaping, assigned parking, vaulted ceilings, and neutral paint throughout. The charming interior offers a lovely kitchen with everything you need, ample cabinetry, pantry, tiled back-splash, and matching appliances. Inside the spacious master bedroom you will find a lavish full bath and a walk-in closet. This perfect sized backyard is comprised of a gravel landscaping, covered patio, storage shed, and paved sitting area great for entertaining. This is the one you have been waiting for. Schedule your showing before its is gone! New AV March of 2017, new roof in 2014 and new windows in 2014

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/!


$299,900 :: 1802 W WINCHESTER Way, Chandler AZ, 85286

4 beds, 2 baths
Home size: 2,039 sq ft
Lot Size: 6,534 sq ft
Added: 08/16/17, Last Updated: 08/16/17
Property Type: Single Family
MLS Number: 5647499
Community: SILVERTON RANCH
Tract: SILVERTON RANCH
Status: Active


Beautifully upgraded 2-story home in Chandler's Silverton Ranch community! This home features 4 bedrooms, 2.5 bathrooms, and is MOVE-IN READY! Open living areas with upgraded light fixtures! Kitchen showcases tons of beautiful cabinets and granite countertops! French door access to covered patio and HUGE, beautifully landscaped backyard! Upstairs master is complete with full bathroom, dual vanity, soaking tub, step-in shower, and walk-in closet! You DO NOT want to miss this one!*Save money with energy efficient solar panels**Seller recently paid for a 3rd party complete home inspection(attached). Home Inspection is attached including all completed repairs.*One or more employees or affiliates of OfferPad are licensed real estate agents*

Listed with OfferPad


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


$265,900 :: 3670 E JANELLE Way, Gilbert AZ, 85298

3 beds, 2 baths
Home size: 1,665 sq ft
Lot Size: 6,098 sq ft
Added: 08/16/17, Last Updated: 08/16/17
Property Type: Single Family
MLS Number: 5647488
Community: SEVILLE
Tract: SEVILLE
Status: Active


Wow! This one is calling out to you! Beautiful 1-story, 3 bedroom, 2 bathroom home in Gilbert's Seville community! Nice tile flooring throughout living areas! Bonus room at entry makes great room for kids play area or even home office! Kitchen boasts of brand new stainless steel appliances, nice size kitchen island with breakfast bar, and pantry space! French door exit to covered patio and beautifully landscaped backyard! Master bedroom is complete with nice walk-in closet and full bathroom with dual vanity! You do not want to miss this one - hurry in today!*Seller recently paid for a 3rd party complete home inspection(attached). Home Inspection is attached including all completed repairs.

Listed with OfferPad


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


$523,000 :: 1784 E PARK Avenue, Gilbert AZ, 85234

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4 beds, 3 baths
Home size: 3,541 sq ft
Lot Size: 31,363 sq ft
Added: 07/14/17, Last Updated: 08/16/17
Property Type: Single Family
MLS Number: 5633563
Community: VAL VISTA MEADOWS
Tract: VAL VISTA MEADOWS
The price of this listing was last reduced on 7/15/2017 by 0%
Status: Active


Come see one of the most Amazing homes in all of Gilbert!! SELLING BELOW APPRAISED VALUE!!! You pick we pay! Seller has agreed to a $6000 allowance for carpet, paint or whatever you want! This home is situated on one of the biggest lots in the area! ( 3/4 acre) The game room is massive!!! Soaring ceilings, formal living-dining room, fireplace, a large loft are just the beginning of what this home has to offer. The gorgeous kitchen is equipped with stainless steel appliances, tile backsplash, NEW Quartz countertops, pantry, and a island with breakfast bar. Inside the downstairs master bedroom you will find a lavish bath, double sink, separate tub & shower. The EXPANSIVE backyard features an extended covered patio, huge grassy area, paved seating area, a refreshing sparkling! pool!!!

Listed with RE/MAX Solutions


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


$334,900 :: 4301 E SAN REMO Avenue, Gilbert AZ, 85234

4 beds, 3 baths
Home size: 2,521 sq ft
Lot Size: 6,534 sq ft
Added: 08/16/17, Last Updated: 08/16/17
Property Type: Single Family
MLS Number: 5647505
Community: TOWNE MEADOWS
Tract: TOWNE MEADOWS
Status: Active


Welcome home! Stunning 2-story home located in Gilbert's Towne Meadows community featuring 4 bedrooms, 3 bathrooms, and a den! Kitchen features new stainless steel appliances, tons of cabinet space and beautiful countertops. Cozy living room with brick fireplace and exit to beautiful backyard with private pool! Den downstairs makes perfect game room or home office space! Upstairs master bedroom complete with full bathroom, large soaking tub, and walk-in closet! This gorgeous home is a must see - hurry in before it's gone!*Seller recently paid for a 3rd party complete home inspection(attached). Home Inspection is attached including all completed repairs.*One or more employees or affiliates of OfferPad are licensed real estate agents*

Listed with OfferPad


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


$1,200,000 :: 3039 E BELLFLOWER Drive, Gilbert AZ, 85298

5 beds, 6 baths
Home size: 5,359 sq ft
Lot Size: 20,037 sq ft
Added: 08/16/17, Last Updated: 08/16/17
Property Type: Single Family
MLS Number: 5647459
Community: ACACIA REPLAT
Tract: ACACIA REPLAT
Status: Active


Enjoy the breath taking San Tan Mountain views in the pool at the swim up bar or by the fire pit. This beautiful basement home is highly upgraded beyond the MODEL recently sold in this gated community. Open floor plan with over $400,000 in upgrades including gourmet kitchen with GE monogram appliances, travertine and beautiful hard wood flooring, knotty alder cabinets and plantation shutters throughout. Fruit trees and a fabulous herb garden located on the west side of the home make lovely ingredients for cooking in this beautiful gourmet kitchen. Located near the Seville Golf Community.

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/!


$275,000 :: 1161 N CHOLLA Street, Chandler AZ, 85224

3 beds, 2 baths
Home size: 1,765 sq ft
Lot Size: 3,920 sq ft
Added: 08/16/17, Last Updated: 08/16/17
Property Type: Single Family
MLS Number: 5647463
Community: Pennington Place
Tract: Pennington Place
Status: Active


This community and home are in the perfect location. Updated 3 bedroom 2.5 bath home in Chandler. Located in a gated community subdivision of Pennington Place. Quiet and peaceful neighborhood. Custom painting and accents. Brand new carpeting throughout and wood flooring just refinished. Huge kitchen center island. Well appointed upgraded cabinets. Extra storage throughout. Enjoy the Community Pool and stroll through the shaded greenbelts. HOA maintains the front yard. Close to Elementary School around the corner. Large City Park in front of the property. Beauty, security and convenience. Great value

Listed with Paramount Management & 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/!


$842,000 :: 4461 S PECAN Drive, Chandler AZ, 85248

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5 beds, 4 baths
Home size: 4,323 sq ft
Lot Size: 8,712 sq ft
Added: 06/15/17, Last Updated: 08/16/17
Property Type: Single Family
MLS Number: 5620065
Community: WATERMARK AT OCOTILLO
Tract: WATERMARK AT OCOTILLO
The price of this listing was last reduced on 8/4/2017 by 1%
Status: Active


Waterlot in Watermark*Gated Community*Former Camelot model* waterfront home w/ pool in Chandler features 4323sf home w/5 bedrooms* 4.5 baths, loft & bonus room w/exquisite custom finishes* travertine, wood floors, alder wood doors & cabinetry to the beamed ceilings & custom built-in cabinetry thru out* Gourmet kitchen w/ granite counters, custom tile backsplash, porcelain farm sink, SS Kitchen Aid appliances & R/O* Butlers pantry w/wine fridge*Breakfast bar & breakfast room w/ built-in workstation & slider to large private courtyard w/ fountain & custom landscaping*paver drive*Entertaining Family room w/ Gas Fireplace overlooks lake & backyard resort w/ Pebbletec pool* water feature & surrounded by lush greenery for privacy and an outdoor kitchen & boat dock*First floor guest

Listed with Orange Sky Boutique RE


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 :: 1512 E Galveston Street, Gilbert AZ, 85295

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5 beds, 3 baths
Home size: 3,284 sq ft
Lot Size: 11,325 sq ft
Added: 07/31/17, Last Updated: 08/16/17
Property Type: Single Family
MLS Number: 5640373
Community: Ashland Ranch
Tract: Ashland Ranch
The price of this listing was last increased on 8/10/2017 by 1%
Status: Active


Location, Location!, Location! Exceptional Ashland Ranch property in the heart of Gilbert! Right down the street from San Tan Mall! All the shopping, entertainment and restaurants that you can imagine! Easy access to the 202 Freeway with an Elementary school in the middle of the subdivision! Home has an open floor plan, soaring vaulted ceilings and a beautiful gas fireplace. The 1st floor offers a large bonus room/ 5th BR... Great for the in laws or visiting guest! Plenty of storage and large walk-in closets too! Kitchen features a large custom island with Newer stainless steel appliances. A Large loft completes this home. This home has NO Neighbors behind and offers a gorgeous landscaped, front and back lawn, private pool, RV gate all on a huge 11,400 soft lot! Come see for your self

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/!


$309,900 :: 3440 E WILDHORSE Drive, Gilbert AZ, 85297

4 beds, 3 baths
Home size: 2,019 sq ft
Lot Size: 11,325 sq ft
Added: 08/16/17, Last Updated: 08/16/17
Property Type: Single Family
MLS Number: 5647474
Community: SAN TAN RANCH
Tract: SAN TAN RANCH
Status: Active


Welcome home! Beautiful 2-story home on HUGE lot in Gilbert's desirable San Tan Ranch community! This home is MOVE-IN READY with brand new plush, custom carpeting and fresh new two-toned paint throughout! Kitchen showcases lots of cabinet and countertop space with brand new stainless steel appliances. Living area is bright and open with sliding glass door exit to beautifully landscaped backyard and pool for your own private backyard oasis! Upstairs master bedroom is complete with nice size walk-in closet and full on-suite bathroom with dual vanity and features access to balcony overlooking backyard! You're not going to want to miss this one - make it yours today!*One or more employees or affiliates of OfferPad are licensed real estate agents*

Listed with OfferPad


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