On Tuesday I was contacted by an Inman News reporter that had previously interviewed me and published a story about cash buyers. She wanted me to share my thoughts about the July’s existing home sale figures that had just been released and get comments “from agents on the ground”. She posed several different questions as to the state of the market and how my market (Arizona) differed from what is going on at the national level. The story she wrote, “Real Estate Agents’ Notes from the Trenches“, was published in Inman News today. I was quoted as follows:
Q: How are conditions in your market? What trends are you seeing with prices and sales?
A: Michele Guss, agent, Thompson’s Realty in Phoenix, Ariz.: “Arizona remains in the top four for high foreclosure rates and slipping values. Personally, based on the current data, I do not think Arizona will stabilize as a WHOLE for at least three years. I do not think we will see 3-5 percent appreciation for home values for another five to seven years.
“I think Arizona is not faring as well as other parts of the country due to high unemployment, the passing of Senate Bill 1070 (an anti-illegal immigration bill), a high amount of bank-owned/short-sale inventory, slowing sales, and the fact notice of trustee sales are still high in Arizona. Typically we see an uptick in the number of sales in the fall due to second-home/winter visitors. Prices are low, interest rates are low (provided the buyer can qualify), so I am optimistic that sales will rise again in the fall due to these factors.
To be honest with you, I was not really happy with the quote that was used. I think it paints a rather bleak picture of our market so I will attempt to clarify my statement. Here are my thoughts in regards to the current market:
- I will be the first to admit that the Arizona market as a WHOLE is not faring well in comparison to other states and cities in other parts of the country.
- I tend to be more conservative, or some would say pessimistic, in my thoughts about our market.
- I believe it is better to err on the side of caution.
- I believe in educating buyers so they are armed with the facts about the current state of the market in relation to where they are interested in living so they can make an educated decision about purchasing a home.
- The numbers do not lie…it is what it is.
- REAL ESTATE IS LOCAL. Some cities or areas are faring better than others.
- Not all areas and cities in Arizona are in the toilet as the media would lead you to believe.
- How the market REALLY is depends on where you are looking to buy, what your price point is to purchase, and what type of funds you plan to use for your purchase, ie: financing vs paying cash.
- To get an accurate picture of what is going on you need to identify the city, area, or subdivision you are interested in.
- Homes in the Phoenix Metro area tend to be priced at market value or close to it.
- If you are looking for a home for “pennies on the dollar” the Phoenix metro area probably is not the area for you.
- Homes for sale in the upper price ranges tend to be closer in and they have not lost as much value as homes in the outlining areas and lower price points.
BREAKDOWN BY PRICE POINT:
According to ARMLS statistics 5,938 single family homes sold in July.
1849 sales listed up to $100,000
2432 sales listed from $100,001-$200,000
845 sales listed from $200,001-$300,000
528 sales listed from $300,001-$500,000
210 sales listed from $500,001-$999,999
74 sales listed over $1,000,000
- Homes in the up to $100,000 and $100,001-$200,000 range are the top sellers in Arizona. Typically homes in this price range sell quickly, especially if they are in good condition. Investors are back in the market in these price ranges and are usually paying cash with no contingencies. As a result, I am seeing multiple bids and alot of homes in these price ranges sell for over asking price. There is not alot alot of inventory.
- Homes in the $200-$300k range. There are fewer buyers in this range. Homes stay on the market longer.
- Homes in the $300-$500k range. Sales are slow in this range. There is a lot inventory. They stay on the market longer, 6 months is not uncommon.
- Homes in the $500k+ range. There are not many sales in this range. There is a lot of inventory.
- Homes over $1M. Few sales. It is not uncommon for the sales cycle to be a year but typically it is a lot longer in this price range.
