Phoenix real estate market trend – 2013 first half

FountainHalf way into 2013 – Where’s Phoenix Real Estate Going and Why?

2012 was a good year for real estate in Phoenix, and the question going into 2013 is “Can prices continue to go up like they did in  2012?” Price appreciation in 2012 in many cities resulted in appreciation over 20%, and sellers eagerly want prices to climb back to 2005 – 2006 levels after enduring 4 brutal years leading up to the market bottom in 2011.  Buyers are also asking what has happened to distressed properties in 2013?  Are foreclosures/short sales coming back? Is the end to the recent price increase right around the corner? Now that we’re more than half way into 2013, the answer to these questions is becoming evident.

 

Distressed Sales by City July 2013

The healing continues for the Phoenix real estate market

The graph to the right is one of my favorite graphs because it is an indicator of market distress within each city.  Instead of throwing out a broad market statistic, the true health of each city is indicated by the percentage of  foreclosure and short sale transactions.  The real substance to this snapshot is the comparison to previous years. To see how far we’ve come, click back to this same chart 2 years ago in 2011, right when the market was bottoming out.  In July 2011, 85% of Avondale’s sales were distress, now  30%. Chandler was over 65%, now its at 2013 Pending Foreclosures graph16%. Mesa distressed sales as a percentage of total sales were over 70%, and have now decreased to 22%. Gilbert went from 63% to 17%. Even Tolleson which saw distressed sales over 90% of total sales two years ago have plummeted to less than 40%.  Many bargain hunting buyers have also noticed the scarcity of short sales and foreclosures that were a source of low priced properties.

One  of the reasons is the continued reduction in pending foreclosures over the past 3 years.  By the end of the year, the pending foreclosures should be where they were in 2004!  Increasing prices have also reduced short sales by reducing the underwater properties.

Cash Buyers – Are they still out there?2013 Cash Purchases

A popular topic regarding who is buying real estate in Phoenix turns to investors. Frequently, first time home buyers will recount how many times they submitted offers only to lose to a cash buyer.  A review of the chart to the right  shows a steady decrease in purchases of homes with cash since the beginning of 2012. The most recent value of 29% is the lowest since June 2010.   Since 2008, the increase in cash purchases, many by investors is supported by the fact that homeownership has decreased from 69.2% at the end  of 2004,  to a low at the end of March 2013.  So are cash buyers still out there? “Yes”, but the trend is downward as prices rise, ROI decreases and distressed sales diminish.

More homes on the market in some cities

Gilbert Historical listings

Some valley cities are have seen a rise in inventory. It is amazing to see the dramatic fluctuation we’ve experienced over the last 3 years. The graph to the right shows Gilbert inventory or homes for sale going back  to Nov. 2010 when the majority of listings were either foreclosures(brown) or short sales (light blue).  Currently in Gilbert and the rest of the valley, listings of normal sales(blue) are higher than they’ve been in at least 3 years. Buyers looking for foreclosures and short sales are finding fewer and fewer.  Other cities also seeing a rise in inventory in the last 4 – 6 months include Avondale, Chandler, Glendale, Mesa, Peoria, Tempe, Queen Creek and Phoenix. Some cities that have seen a reduction in inventory or maintain current levels in the last 4 – 6 months; Gold Canyon, Goodyear, Scottsdale, Sun City, Sun Lakes and Surprise. Age restricted communities typically see inventory listings increase the last half of the year.

And Interest Rates. . . .

The effect of  interest rates must be factored into the demand side of the equation.  Rates in the last couple of months have risen by more than 1%. To see the effect that this can have, consider a buyer that can afford $1,200/month  for principal and interest.  With a 10% down payment and a 4% interest rate, the buyer can afford a $280,000 home.  When interest rates go up to 5%, that same $1,200 per month mortgage allows the  buyer to purchase a $250,000 home. That 1% rise in rates reduced the purchasing power by $30,000.

So tell us about prices….

Mesa 2013 GraphI know that you’ve kept reading so you can get to the good stuff, where are prices going?   Every city saw significant appreciation during 2012.  For many cities the start of 2013 is an extension of last year. However, there is moderation or reduction of appreciation in others as measured by the average price $/sq.ft. For example, Mesa is showing 13% year to date as seen in the graph to the left, and may come close to that seen in 2012.Goodyear 2013 Graph

Other cities such as Surprise, Scottsdale, Sun Lakes, Gold Canyon, Sun City West, Casa Grande, Apache Junction and Goodyear have seen weaker appreciation when viewing appreciation measured by Average Price$/Sq.Ft. of sold homes and may not reach the levels they saw during 2012.  The graph to the right shows appreciation for Goodyear which is at about 6% year to date appreciation, about half that of Mesa’s.

Cities that have shown strong positive appreciation during the first half of the year include Avondale, Phoenix, Tempe, Chandler, Gilbert, Peoria, Mesa, and Glendale.  Obviously, within each city there will be 2013 Gilbert Graphvariations depending on square footage, year built, price point, features, condition, lot size, etc.   If you’d like me to review comparable sales for your property, click on What’s the Value of My Home. To receive available homes for sale, click on Send Me New Listings.

A reduced appreciation rate compared to 2012 is understandable as prices continue to climb when buyer’s income isn’t increasing as rapidly and the increase in mortgage interest rates reduces buying power.  Coupled with the reduction in distressed properties points to the Phoenix market and surrounding cities returning to a more normal market.  Wow, its been a long time since we’ve seen one of those!

 

Other posts in the blog

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Who loses on a foreclosure, the bank? Think Again!

 

$650,000 :: 1418 W EMERALD KEY Court, Gilbert AZ, 85233

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3 beds, 3 baths
Home size: 2,798 sq ft
Lot Size: 9,148 sq ft
Added: 12/04/20, Last Updated: 01/09/21
Property Type: Single Family
MLS Number: 6167989
Community: SHORES AT THE ISLANDS
Tract: SHORES AT THE ISLANDS
Status: Active


LAKE FRONT HOME in Cul-de-sac!! This is a 2800 sq. foot home with a pool!! Beautiful location on the point with 3 lake channels views in the sought-after ''Island'' community In Gilbert. There are 2 master suits, an additional setting room area, and have amazing lake views!! Master is one wing of the home, split, with 2 exits to the pool, lake and patio area!! Awesome backyard with incredible views, cover patio, boat dock, artificial grass, mature landscaping. Kitchen has granite, lots of counter space, gas cook top, duel ovens, stainless appliances and lots of cabinets. Eat in kitchen with great views!! Formal living/dining room, huge family room, 2-way fireplace, 2 upgraded 16 seer AC units, great community, walking, biking, volleyball and a lot more!!

Listed with The Manz Group


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$800,000 :: 1409 N MISSION COVE Lane, Gilbert AZ, 85234

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3 beds, 3 baths
Home size: 2,972 sq ft
Lot Size: 9,584 sq ft
Added: 01/02/21, Last Updated: 01/08/21
Property Type: Single Family
MLS Number: 6172318
Community: MISSION BAY ESTS AT VAL VISTA LAKES AMD 1-73 A-D
Tract: MISSION BAY ESTS AT VAL VISTA LAKES AMD 1-73 A-D
Status: Active


Live the luxury lakefront lifestyle in Val Vista Lakes! This well-maintained and beautifully updated single-level home is perfectly situated on the lake with extensive uninterrupted views of West Lake. Highly desirable location in Gilbert - one of the most sought after cities to live! This home would be perfect for a lock-n-leave during the winter months or gracious year round residence. New granite kitchen countertops on full-overlay cherry cabinets. Center island cooktop ideal for entertaining or slipping out to the covered patio for dining al fresco. Island bar seating for 3-4 or large sunny dinette with beautiful plantation shutters. Add the formal dining room and you could host large gatherings for friends & family. Open concept kitchen and family room with corner fireplace

Listed with Keller Williams Integrity First


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


$679,000 :: 437 E HEARNE Way, Gilbert AZ, 85234

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4 beds, 3 baths
Home size: 2,929 sq ft
Lot Size: 7,841 sq ft
Added: 12/31/20, Last Updated: 01/03/21
Property Type: Single Family
MLS Number: 6175800
Community: STONEBRIDGE LAKES ESTATES UNIT TWO LT 1-203 TR A-H
Tract: STONEBRIDGE LAKES ESTATES UNIT TWO LT 1-203 TR A-H
The price of this listing was last reduced on 1/3/2021 by 3%
Status: Active


Beautiful Waterfront Lot in the Gilbert Lake Community of Stonebridge Lakes Estates. Just minutes from Downtown Gilbert and Freestone Regional Park. This one-owner home shows pride of ownership. You'll love the gorgeous lake views from your family room, kitchen, office and master bedroom/balcony. Eat-in kitchen opens to great room and has quartz countertops, island and walk-in pantry. Home boasts plantation shutters, ceiling fans & marble window sills t/o as well as California Closets in several rooms. Many improvements have been made to home: Interior/Exterior paint in 2020.Newer Trane XR heating/ac system (2016), Newer security system (2017), Newer galvanized lake fence & invisible pool/lake fence to protect dogs from lake...Newer sand filter..Newer pool decking, Newer water softener

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/!


$800,000 :: 1818 E WILLOW TREE Court, Gilbert AZ, 85234

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2 beds, 3 baths
Home size: 2,992 sq ft
Lot Size: 11,762 sq ft
Added: 12/10/20, Last Updated: 12/21/20
Property Type: Single Family
MLS Number: 6168349
Community: LAKESIDE AT VAL VISTA LAKES
Tract: LAKESIDE AT VAL VISTA LAKES
The price of this listing was last reduced on 12/21/2020 by 3%
Status: Active


Highly sought-after single-level waterfront on the main lake on Val Vista Lakes. This immaculately maintained home is move-in ready. Very low maintenance and perfect lock-&-leave property for people on the go or as a seasonal home. Situated on a point & very open portion of the lake with views in all direction. Private dock where you can set sail for a sunset cruise or over to the clubhouse for a quick round of tennis or pickle-ball, or work-out at the gym. Large kitchen with stainless steel appliances, granite countertops, excellent views of the water and large dinette area. Loads of storage with 2 pantries and addition service bar. Large owner's suite overlooking the lake, large bathroom and walk-in closet & more storage! Second en-suite master with another large walk-in closet!

Listed with Keller Williams Integrity First


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


$2,000,000 :: 193 N SKI Court, Gilbert AZ, 85233

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5 beds, 7 baths
Home size: 6,700 sq ft
Lot Size: 20,038 sq ft
Added: 11/02/20, Last Updated: 11/02/20
Property Type: Single Family
MLS Number: 6155305
Community: CRYSTAL POINT ESTATES AMD LOT 1-20 TR A-H
Tract: CRYSTAL POINT ESTATES AMD LOT 1-20 TR A-H
Status: Active


Resort style living. Freshly remodeled Custom Home on a private water ski lake. Water ski, wakeboard, sail or paddle just out your back door. New limestone walkways lead you to iron doors that open to a 21' tall foyer & great room. A fantastic view of the pool & lake thru a wall of glass. Master Suite, private office & guest bedroom are on first floor. All bedrooms have their own full bath. Enjoy: Quartzite counters w/maple cabinets & 2 islands . Built in SS refer, ovens, warming draw, 6 burner cooktop, DW & prep sink. The home boasts: An oversize 5 car garage. Bonus Room w/ wet bar & pool table. Covered patios & balcony w/ bbq, hood & sink. Covered boat dock w/ lift, sink & refer. Storage building for pool & lake toys. Remodeled pool and spa. Commercial misters. Outdoor shower. Etc.

Listed with The Hogan Group 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/!


 

 

 

 

 

 

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