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

$329,999 :: 1302 W BARTLETT Way, Chandler AZ, 85248

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4 beds, 2 baths
Home size: 2,119 sq ft
Lot Size: 7,405 sq ft
Added: 10/19/17, Last Updated: 10/19/17
Property Type: Single Family
MLS Number: 5676116
Community: Ocotillo Lakes
Tract: Ocotillo Lakes
Status: Active


Value Priced for a Quick Sale! This large and spacious 4 bedroom/2 Bath home is located in the desirable Chandler subdivision of Ocotillo Lakes and is priced $43K Below the most recent comp of the same floorplan in Ocotillo Lakes that closed on 8/9/17. This home was built in 1998 and has had only 1 owner. The home is clean and well maintained but does need updating and is priced to reflect that. This beautiful home features; a 3 Car Garage, Wood Shutters & tile throughout the home, Corian counter tops in the kitchen, new dishwasher, eat-in kitchen with a bay window and an island for bar stools, a formal dining room for holiday gatherings, water softener, sink in the garage, North/South Lot. The Backyard faces North so you will be able to maximize your time outside enjoying our AZ climate!

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/!


$320,000 :: 1509 S Western Skies Drive, Gilbert AZ, 85296

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3 beds, 2.5 baths
Home size: 2,182 sq ft
Lot Size: 6,098 sq ft
Added: 10/19/17, Last Updated: 10/19/17
Property Type: Single Family
MLS Number: 5676114
Community: WESTERN SKIES ESTATES UNIT 5 A
Tract: WESTERN SKIES ESTATES UNIT 5 A
Status: Active


Welcome to your new Smart Home! Open, bright & popular Great Room Floorplan, 3 Bedrooms w/the potential of 2 Extra Bedrooms & 2 1/2 Baths. Home has been meticulously maintained & the pride of ownership shows! Monitor your Front & Garage Doors, turn your Lights, Pool, Fountain & Water Features on & off with your phone w/a simple app!Popular Great Room plan has bright Kitchen w/Granite Counters, Island & Large Walk-in Pantry. Head Upstairs to find a huge Loft & Bonus Area & Bedrooms. Master Suite boasts 2 Walk-in Closets, Tub/Shower & Dual Sinks. Walk-in Laundry Room is upstairs for convenience.Spacious Loft & Bonus Area has endless possibilities for uses such as Video Gaming Zone, Billiards, Darts & Game Room & the Bonus Area could easily be a 4th Bedroom, Office, Homework/Study...

Listed with The Daniel Montez Real Estate 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/!


$245,000 :: 521 E DEL RIO Street, Chandler AZ, 85225

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3 beds, 2 baths
Home size: 1,329 sq ft
Lot Size: 4,791 sq ft
Added: 10/19/17, Last Updated: 10/19/17
Property Type: Single Family
MLS Number: 5676113
Community: SUMMERSET
Tract: SUMMERSET
Status: Active


Single Family Home built in 1996 has Tile Roof, 3 bedrooms, 2 baths, 2 Car Garage & is located in the Desirable City of Chandler. This Single Level Home has an Open Floor Plan & also a Split Floor Plan. The minute you walk in, you Notice the Vaulted Ceilings, the Open & Airy Family Room with the Cozy Gas Fireplace open to the Large Kitchen with Plenty of Cabinets & Modern White Appliances. Contemporary Paint Colors throughout, Energy-Efficient Trane A/C Unit installed in 2010, Low E Vinyl Dual-Pane Windows for Energy Efficiency, Huge Laundry Room. Washer & Dryer Convey. Guest Bath has Granite Countertop, newer fixtures & lighting & the shower is surrounded by tile. Large & Private Backyard with No 2 Story Homes around it & room to build a Pool. Extended Covered Patio. All This And NO HOA

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/!


$259,900 :: 1213 W KESLER Lane, Chandler AZ, 85224

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3 beds, 2 baths
Home size: 1,315 sq ft
Lot Size: 5,662 sq ft
Added: 10/19/17, Last Updated: 10/19/17
Property Type: Single Family
MLS Number: 5676108
Community: BLAKEMAN RANCH UNIT 1
Tract: BLAKEMAN RANCH UNIT 1
Status: Active


Welcome to your new home in beautiful Blakeman Ranch, Chandler! You are in the right place at the right time to find this amazing 3 bed, 2 bath, 1,315 sf GEM! Beautiful stone and rock landscaping welcomes you to a private front entrance. Cool grey and white paint, large 20'' tile, vaulted ceilings, upgraded fans and fixtures, Granite countertops, white kitchen cabinets and stainless steel appliances update and modernize to make it Move In Ready! The Spacious and Gorgeous green grass back yard will seal the deal for you! Very Convenient location close to Chandler Mall, 101, 202, Intel, restaurants and shopping! This is one you've got to see! Saturday Open House 10am - 2pm!

Listed with Keys to Your Dreams 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/!


$269,000 :: 663 N Sunway Drive, Gilbert AZ, 85233

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3 beds, 2.5 baths
Home size: 1,698 sq ft
Lot Size: 6,534 sq ft
Added: 10/18/17, Last Updated: 10/19/17
Property Type: Single Family
MLS Number: 5676103
Community: El Dorado Lakes Golf Community
Tract: El Dorado Lakes Golf Community
Status: Active


Beautiful, rare property in highly desirable El Dorado Lakes Golf Community. Three bedroom, two and a half bath home has been recently remodeled and beautifully appointed. Featuring stunning new high end porcelain floors, new granite counters, new modern kitchen cabinets, stainless steel appliances, interior just painted, and so much more! Located minutes from the US 60, downtown Gilbert, superb fine dining and entertainment, this property is a true gem

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/!


$239,000 :: 926 E CARLA VISTA Place, Chandler AZ, 85225

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3 beds, 2 baths
Home size: 1,454 sq ft
Lot Size: 4,791 sq ft
Added: 10/18/17, Last Updated: 10/18/17
Property Type: Single Family
MLS Number: 5676070
Community: TRADITIONS WEST
Tract: TRADITIONS WEST
Status: Active


Very nice home, ready to move in. Exterior has fresh paint and great curb appeal. Interior has fresh paint throughout, new carpeting, tile in all the right places, vaulted ceilings. The kitchen has new stainless steal appliances that includes a side by side refrigerator with ice & water dispenser, built in microwave, self cleaning flat top range, dishwasher, new counter tops/new sink and faucet. there is a dining area and a breakfast bar. The master has tub/shower, double sink dressing vanity, walk in closet, private toilet. Come see this one. vacant on lock box.

Listed with RE/MAX 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/!


$393,000 :: 540 N MAMMOTH Way, Chandler AZ, 85225

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3 beds, 2 baths
Home size: 2,448 sq ft
Lot Size: 9,583 sq ft
Added: 10/18/17, Last Updated: 10/18/17
Property Type: Single Family
MLS Number: 5676054
Community: DOBSON PLACE PARCEL 9B
Tract: DOBSON PLACE PARCEL 9B
Status: Active


A gem in Dobson Place Community. 3 beds and 2 baths. Spacious and luxury. Split floor plan with surround sound speakers in each room and patio. New paint. Pebble Tec pool for family summer fun. Mature citrus trees in backyard, green grass areas in yard. Across the street from Blue-Ribbon Awarded CTA-Liberty campus and within walking distance to Basis Chandler North campus. Wow, two great schools! And best yet, the community park is your front yard: plenty green grass, slides for children, basketball court and walking paths.

Listed with Gold Trust 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/!


$400,000 :: 2740 W SHANNON Court, Chandler AZ, 85224

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3 beds, 2 baths
Home size: 2,298 sq ft
Lot Size: 6,534 sq ft
Added: 10/18/17, Last Updated: 10/18/17
Property Type: Single Family
MLS Number: 5676075
Community: RAINTREE RANCH EAST LOTS 87-16
Tract: RAINTREE RANCH EAST LOTS 87-16
Status: Active


Original owner; Forecast Redondo model floorplan; immaculate and beautiful home; upon entering formal dining room and living room is to your left; window covering matching design of the dining room chairs; and office/den/4th bed to your right; continue entering the home you notice the like new wood laminate flooring; great room featuring fireplace and kitchen. Kitchen features beautifully done engineered quartz countertops, commercial gas range w/grill, all stainless steel appliances. The huge kitchen windows presents breathtaking lake views! (See the drone video). The bedrooms are on the southwing; master features sitting room with its own lake views; dual vanities in master bath and HUGE walk-in closet; separate garden tub, and more. This home will sell fast!

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/!


$238,900 :: 2312 E COMMONWEALTH Avenue, Chandler AZ, 85225

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4 beds, 2 baths
Home size: 1,571 sq ft
Lot Size: 7,405 sq ft
Added: 10/18/17, Last Updated: 10/18/17
Property Type: Single Family
MLS Number: 5676059
Community: COLONIA CORONITA
Tract: COLONIA CORONITA
Status: Active


Hey! Look over here! Adorable and MOVE-IN READY home in Chandler's Colonia Coronita community! Brand new plush, custom carpeting with fresh new two-toned paint throughout home! Open living area with large sliding glass door leading to covered patio and enclosed, private backyard! Kitchen boasts of brand new, pretty white cabinets that compliment black appliances with nice size breakfast bar! Master bedroom features two BIG closet spaces and private, updated bathroom plus separate exit to backyard! This one is going to go fast - you don't want to miss it!*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/!


$306,900 :: 3417 E KENT Avenue, Gilbert AZ, 85296

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3 beds, 2.5 baths
Home size: 1,733 sq ft
Lot Size: 7,840 sq ft
Added: 10/18/17, Last Updated: 10/18/17
Property Type: Single Family
MLS Number: 5676087
Community: HIGLEY PARK
Tract: HIGLEY PARK
Status: Active


Must see Higley Park stunner! MOVE-IN READY with tons of beautiful upgrades and new two-toned paint throughout! Open living area flows into kitchen with tons of windows for natural light throughout! Kitchen showcases upgraded granite countertops, chef's island with breakfast bar, and pantry space! Exit to enclosed backyard with your own private pool - perfect for entertaining! Master showcases gorgeous, upgraded bathroom with dual vanity, large soaking tub, and step-in shower! This gorgeous home is going to go fast!*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 the Seller 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/!