Phoenix Real Estate Market a Confusing Environment? Just Phoenix?

S. Chris Webb, "PHX AZ RE BROKER"
- 5.0/5.0
- (2 reviews)
Contributions:411

Yesterday this article came up in local headlines. Confusing is an understatement. Every night on the news I hear how "this is a buyers' market", we have "Excessive Inventory" and that there is a glut of foreclosed upon (REO) homes on the market. However, currently in the locations of the Valley (Phoenix Metro Area) I generally work, buyers are having difficulty getting offers accepted, even when offering all cash at or even well above asking price. There are always "multiple offer" situations if the house is being listed at a price close to comparable sales. If you look at the trends in these areas, homes are very selling close to MLS listing price on average. I'm seeing this in both the far suburbs of Surprise & Goodyear, as well as half-million dollar homes in Aviano (northeast Phoenix). We've been warned about the "shadow inventory" of REO's but the banks just don't seem to be foreclosing and releasing on the market any more. It seems there's nothing left but junk, overpriced "flips", and dubious short sales left on the market.

MY question is this: is the same thing happening in metro areas across the country, and are we being deceived about the true nature of this market by the nightly news? Or are agents working in different parts of the Valley experiencing different?

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August 29 2011 - Phoenix

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Replies (3)

Bill Smith, "billsmith."
- 5.0/5.0
- (5 reviews)
Contributions:37

I am currently in Orange County, Ca and our market is completely different. Short sales seldom go to foreclosure, investors and other buyers will usually make above asking price offers (10-15 offers in the first few days!). It can become an auction environment. Foreclosures are more popular as most buyers are aware there's nothing short about a short sale.
I'm licensed in Az too and your current inventory is 50% of normal. The last time I looked you had less than 20,000 homes available. Hopefully, that may bump prices a little. There seems to be a higher percentage of undesirable homes and fewer nice units right now.

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August 29 2011

Dunes....
Contributions:3894

"but the banks just don't seem to be foreclosing and releasing on the market any more."

Have you heard of MERS?

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August 29 2011

Jason McNeal, "Jason McNeal"
- 4.9/5.0
- (5 reviews)
Contributions:20

The Phoenix market is in a high state of flux. Most all real estate metrics / fundamentals are trending in a good direction. There are a lot of metrics that national measures such as Case Schiller report on that are essentially lagging indicators (case-schiller is something like 3-6 months behind). Many of these lagging indicators are capturing the real time picture of what's going on in this market.

Forecasting is difficult and a lot of people get it wrong, but my sense is that 2012 will finally show a rebound in the Phoenix housing market and if supply continues falling at current rates, I wouldn't be surprised to see prices have a significant bump. Last, but not least, if we start having owner/occupants buying again, and supply continues to dwindle, we have the potential to see another mini buying frenzy such as 2004. Prices dropped so much, so fast, that they're below a long run equilibrium. Supply and Demand has changed dramatically in the last year and prices ultimately must rise to meet their long term equilibrium.
Everyone likes to jump on the bandwagon, so lookout for news of positive appreciation in Phx housing in 2012 and a lot of people finally moving off the sideline to buy, but finding that there's hardly anything left on the shelves...
-Jason