Arizona Real Estate in 2012? What’s the Outlook?
Finally some good news for the Arizona housing market!
Our real estate market in 2012 is likely to be better than 2011, but it is true that recovery may still be somewhat slow. It is likely that any significant increases in prices will start in 2015. However, we are now seeing a light at the end of the tunnel. In 2011, the lowest price per square foot was recorded in January of 2011. We have seen an increase in price per square foot since. Even though the inventory levels have depleted in some areas, we are still dealing with higher than normal inventory levels. Our market will not fully recover until we deplete this supply however we are slowly chipping away.
The law of supply and demand says, “If supply decreases and demand remains unchanged, then it leads to higher price and lower quantity.” That’s exactly what is going on in the Phoenix market at the moment, the supply is slowly decreasing and the demand remains consistent. It is predicted that, as we near 2015, these levels will reach normal levels and, with normal demand, we should see a jump in prices. At this point we are only seeing small increases.
Foreclosures and short sales, which are still common, continue to thwart any substantial price increases in the market and have been for about 6 years now. In the third quarter of 2011, 25 percent of homes were foreclosures and an additional 29 percent were short sales.
In better news, over 40 percent of the homes being sold currently are to investors. Since the rental market is hot (those that have sold short or foreclosed need to live somewhere) and the prices are low, investors are cleaning up. Hint, hint…that’s a sign that it’s a great time to buy. Investors are snapping up great rental properties left and right.
Wait wait there’s more… here’s another positive, the number of units going into foreclosure is declining. That will help with inventory levels and depending on population growth and job growth, 2015 seems like the magic year for the Phoenix housing market.
Bottom line, get ‘em while they are hot in 2012, and, if you are in financial trouble and it makes sense to leave your home, look into the benefits of a short sale (call 602.476.1942 or email firstname.lastname@example.org for short sale info). It may make more sense for you to sell short vs foreclose and it helps keep foreclosures from flooding our real estate market.
Happy New Year from The Halle Group!