Phoenix home prices – looking in the rear view mirror

A recent Wall Street Journal article conveys “Here’s More Evidence That Home Prices

Is the worst finally over for the Phoenix Housing Market?

Have Hit Bottom.”

The indicators for the Phoenix market are clear that the bottom was reached in February of this year and that rapid appreciation is continuing. The implications or effects are myriad:

Traditional home purchasers, those with FHA or VA loans and a low down payment, have several obstacles in their paths.

  • First they sense an urgency to purchase before prices rise even more. Many parts of the Valley have experienced 20% appreciation this year.
  • Second, the rapid change in prices makes appraisals more difficult since appraisals are typically based on a lagging average of comparable home sales. This makes the home sellers wary of accepting financed offers, for fear that the financing will not be approved.

Cash investors have the upper hand with their ability to respond to price changes and close on their purchases without the requirement of an appraisal. Many of these investors are purchasing to rent, not to immediately resell the home. The net effect is to further reduce the inventory available for traditional home buyers.

Typical Valley Appreciation Since Jan 2012 (Zip 85302, Glendale, AZ)

New home construction can be expected to expand immediately to meet the demand. There are tales already of customers lining up at new home construction projects throughout the Valley.

For more information hear our recent interview on NPR  – The Housing Market: Have We Finally Hit Bottom? 

Comments

comments

About Mike Garland

In this age of software, data bases and cloud technology, residential real estate provides an anchor to physical reality. At least for now, there is no virtual reality where people can share a meal, a swim in the pool or laugh in the living room with a view of Camelback Mountain the way they can in a luxury home. I enjoy helping people find and sell homes in the Phoenix Valley. With my team we specialize in residential real estate in the Biltmore area, Paradise Valley and the West Valley. I also head up the Toma Partners relocation group.
This entry was posted in Real Estate and tagged , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *