Half 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.
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 
16%. 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?
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
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….
I 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 $/sq.ft. For example, Mesa is showing 13% year to date as seen in the graph to the left, and may come close to that seen in 2012.
Other cities such as Surprise, Scottsdale, Sun Lakes, Gold Canyon, Sun City West, Casa Grande, Apache Junction and Goodyear have seen weaker appreciation when viewing appreciation measured by Average Price$/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 
variations 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
Are addresses in Phoenix cities that helpful?
Who loses on a foreclosure, the bank? Think Again!
$629,000 :: 1346 W MEADOW GREEN Lane, Gilbert AZ, 85233
3 beds, 2 baths
Home size: 1,644 sq ft
Lot Size: 4,356 sq ft
Added: 04/19/23, Last Updated: 06/01/23
Property Type: Single Family
MLS Number: 6544215
Community: CORAL POINTE LOTS 3-6
Tract: CORAL POINTE LOTS 3-6
Status: Active
Welcome to the Falls Gated Community. Neutral 20'' Tile, wood blinds, and ceiling fans throughout! The Living/Family Room is stunning with a gas Rock Fireplace. Formal Dining and a great family or entertaining space. Doors lead out to the Patio with the sound of the soothing Water Fall and Water Views along two sides of the home. The Kitchen has Custom Alderwood Cabinets with Granite countertops, a Pantry, Eat-in space and Stainless Appliances. The Baths have updated Cabinets, Granite Counter Tops and Glass Doors. Garage has epoxy floor coating. Community includes a lake side pool.
Listed with Keller Williams Realty Sonoran Living
Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!
$1,400,000 :: 2004 E CATAMARAN Drive, Gilbert AZ, 85234
4 beds, 3.5 baths
Home size: 4,038 sq ft
Lot Size: 14,375 sq ft
Added: 05/27/23, Last Updated: 05/27/23
Property Type: Single Family
MLS Number: 6558805
Community: The Regatta at Val Vista
Tract: The Regatta at Val Vista
Status: Active
Custom waterfront home on the Regatta Lake. Beautiful property on a large lot in gated Val Vista Lakes subdivision. 4 -car garage with a large driveway in a cul-de-sac makes this a one-of-a kind !
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/!
$2,100,000 :: 1750 E COCO PALM Court, Gilbert AZ, 85234
4 beds, 4 baths
Home size: 3,421 sq ft
Lot Size: 12,197 sq ft
Added: 05/26/23, Last Updated: 05/26/23
Property Type: Single Family
MLS Number: 6560481
Community: LAKESIDE AT VAL VISTA LAKES
Tract: LAKESIDE AT VAL VISTA LAKES
Status: Active
Sophistication and style meets waterfront. Elegant single level living await you in this beautifully updated home. Expansive lake views from this lot on the point allow for privacy in the pool and spa. Entire wall of glass slides open giving you large spaces to entertain from the outdoor to indoor kitchen and dining areas. Dreamy kitchen with Thermador 8 burner gas burner stove & dual ovens, Thermador side by side refrigerator and large island with seating for 6. Need Storage? This house has it! Large open family room, dinette & kitchen. All ensuite bedrooms have walk-in closets. Enjoy the outdoor lifestyle with the covered outdoor kitchen that includes a green egg smoker and gas bar-b-que. Heated pool and spa with negative edge so you can soak up the sun with friends or soothe those
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/!
$845,000 :: 1248 W EDGEWATER Drive, Gilbert AZ, 85233
5 beds, 3 baths
Home size: 2,719 sq ft
Lot Size: 7,841 sq ft
Added: 05/11/23, Last Updated: 05/11/23
Property Type: Single Family
MLS Number: 6550410
Community: CATALINA BAY AT THE ISLANDS UNIT 4
Tract: CATALINA BAY AT THE ISLANDS UNIT 4
Status: Active
!SPECTACULAR WATERFRONT LOCATION WITH OUTSTANDING VIEWS ! This property is tucked away in a quiet Cul-De-Sac on a North South facing lot. There are 5 bedrooms and 3 baths. The master bedroom is oversized with a full length patio overlooking the lake & 2 closets. . Relaxing great room includes a cozy fireplace & great views of the backyard. It's all LAKE in the backyard. You'll never want to leave! There's a large community park within walking distances that includes lots of social events including Concerts in The Park, Easter Egg Hunt, Holiday Boat Parades, Fall Car Show & more! You'll truly love this home & community. It's centrally located and just minutes away from downtown Gilbert and Chandler that both have an abundance of restaurants and things to do for all ages.
Listed with Keller Williams Realty Sonoran Living
Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!
$875,000 :: 1010 S PRESIDIO Drive, Gilbert AZ, 85233
4 beds, 2.5 baths
Home size: 2,507 sq ft
Lot Size: 10,890 sq ft
Added: 04/09/23, Last Updated: 05/03/23
Property Type: Single Family
MLS Number: 6530262
Community: WINDHAVEN UNIT 2 AMD LOT 1-71
Tract: WINDHAVEN UNIT 2 AMD LOT 1-71
Status: Active
Stunning Single Level Waterfront Property in the Islands! Large lot with private pool and scenic water views. Kitchen features updated cherry stained cabinets with pull-outs, and a Large kitchen island. A large Primary bedroom with Dual walk in closets an Updated oversized Shower, New Dual Pane Windows & a separate access to your resort style backyard. Home has Plantation shutters throughout, formal DR, large laundry room, vaulted ceilings, fans throughout. Lake subdivision community with biking, walking paths, community center, park/playground, Roof replaced Sept 2015! Home has many accessibility features including walk-in tub. The shed is on a cement slab and remains
Listed with Keller Williams Realty Sonoran Living
Brought to you by Gordon Baker, Remax Alliance Group. Call me today at 480-326-8571, or visit my website at www.myhomeinaz.com/!
$1,000,000 :: 1211 N REGATTA Drive, Gilbert AZ, 85234
4 beds, 3 baths
Home size: 3,342 sq ft
Lot Size: 9,584 sq ft
Added: 03/29/22, Last Updated: 04/29/23
Property Type: Single Family
MLS Number: 6375573
Community: REGATTA AT VAL VISTA LAKES
Tract: REGATTA AT VAL VISTA LAKES
Status: Active
FABULOUS WATERFRONT ** VIEW DOWN THE LAKE ** VERY SPACOUS ** MASTER BEDROOM IS DOWNSTAIRS PLUS BEDROOM OR OFFICE AND TWO BEDROOMS AND A BATH ARE UPSTAIRS ** GREAT FAMILY HOME ** PLUS THE AMENITIES YOU RECEIVE FROM VAL VISTA LAKES ** CLUBHOUSE ** PICKLEBALL/TENNIS COURTS** COMMUNITY POOL AND SPA ** WORKOUT ROOM AND WEIGHT ROOM ** LOTS OF GREEN SPACE EVERYWHERE ** WALKING PATHS ** BASEBALL DIAMOND ** SO MUCH TO SEE HERE, COME AND TAKE A LOOK, YOU'LL BE HAPPY YOU DID **
Listed with Penfield 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/!
$499,000 :: 1664 E BRIDGEPORT Parkway, Gilbert AZ, 85295
3 beds, 2 baths
Home size: 1,467 sq ft
Lot Size: 872 sq ft
Added: 04/05/23, Last Updated: 04/05/23
Property Type: Condo/Townhouse/Co-Op
MLS Number: 6540481
Community: VAL VISTA CLASSIC PARCEL 1 CONDO BLKS 1 32-34
Tract: VAL VISTA CLASSIC PARCEL 1 CONDO BLKS 1 32-34
Status: Active
LOWEST PRICED WATERFRONT HOME IN ALL OF GILBERT!! RARE - LAKEFRONT INVESTMENT or FUTURE RELO - Fully Furnished, Waterfront Facing Condo has private courtyard & is currently leased for $2,700/mo thru 6/30/23. 3 Private Bedrooms (1 converted to office with prof built in double wall desks), Master is on 1st floor, HUGE BONUS loft currently being used as large bedroom with 2 Queen Size Beds & private balcony. Kitchen is highly upgraded with Granite Counters, SS Appliances, decorative lighting. Fridge, Washer & Dryer incl. Anderson Doors & Windows. 2 Car Attached (side by side garage- NOT Tandem) and less than a handful of homes from MAIN Community Pool. This highly desirable Gated, Lake Community has 3 Resort Like Community Pools, fully lit Basketball Court, Several Tot Lots, Several Lakes
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/!
$575,900 :: 1025 W PENINSULA Drive, Gilbert AZ, 85233
4 beds, 3 baths
Home size: 2,787 sq ft
Lot Size: 10,019 sq ft
Added: 12/05/20, Last Updated: 01/27/21
Property Type: Single Family
MLS Number: 6156476
Community: WINDHAVEN
Tract: WINDHAVEN
Status: Active
BEST PRICED WATERFRONT ISLAND HM.N/S.EXP.OVER 10K SF WATERFRT VIEW LOT W/94 FEET OF WATER FRONT & APPROX.120FT DEEP LOT.PRVT DOCK BRIGHT&OPEN.FORMAL LVG;DININGNOOK+FR.VAULTED CEILING.UPDATED FLOORING;GRANITE COUNTER KITCHEN CABINETS;WHITE WOOD SHUTTERS.SECURITY DRS@ENTRY&BACK PATIO DBL FRENCH DOOR. OVER-SIZED COV'D PATIO.WET BAR W/GRANITE COUNTER.ALL BATHS HAVE BEEN REMODELED.MASSIVE MASTER BR W/HIS&HER'S CLOSETSSEP.TUB/SHOWER.2 SINKS W/SPACIOUS COUNTER SPACE&STORAGE.DBL FRENCH DOOR W/SEC.IRON GATE WALK ON TO PVT WATER FRONT VIEW DECK FOR YOUR LEISURE MORNING RELAXATION -THEN RETURN TO ENJOY THE INCREDIBLE ARIZONA SUNSET-LIFE IS JUST PERFECT HERE. HURRY! CALL NOW FOR YOUR PRIVATE TOUR ARRANGEMENT. MUST SEE TO APPRECIATE. MASKS REQUIRED WHILE ON THE PREMISE.
Listed with FDR 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/!
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