Welcome Arizona and Nevada to the California Housing Comeback story. Today's National Existing Home Sales report shows big gains being made by the areas in which there is an overabundance of distressed properties – California, Nevada and Arizona. And no surprise, as much as 45% of all the sales activity in these areas in February involved a deeply discounted foreclosure sale.
I reported this weekend about the Reno/Sparks Nevada Housing Market Turnaround Underway, now it's time to look at Arizona.
Pending listings, which are home sales in negotiation or under contract, are up 90 percent in the Valley of the Sun. Real-estate agent Michael Orr, who tracks Arizona Regional Multiple Listing Service data, said there are currently about 9,600 pending sales in the system. If all of those pending sales — or even most of them — turn into actual home closings, March and April will be great months for the Maricopa County housing market. Here is his report:
The Cromford Report, Daily Arizona Real Estate Market Report:
March 22, 2009 – Buying Gets Stronger Still
There is no doubt that we are experiencing a boom in buying across all the areas where pricing is very low. This increase is having little effect on properties above $150,000 but below that mark, and especially below $100,000, I'm tempted to call it a feeding frenzy. The effect is also largely confined to single family detached homes, with condos experiencing relatively weak buying interest.
Listing success rate across all areas and types is now over 50% – we haven't seen that since June 2006.
Pending listings approach 11,000, a level last seen in August 2005.
Active listings are at 50,561, their lowest point since April 2007. However that total includes 1,928 active listings with contingent offers, up from 883 at the start of the year. So the increased demand is eating away at the over-supply quite nicely.
The statistics tell one aspect of the story, but personal experience reinforces it. I have made offers on several inexpensive properties in the last few weeks, for myself and on behalf of clients. In every single case there were multiple offers. In one short sale case there were as many as fourteen offers on the table at the bank before I even made an offer. In fact I have so far not managed to be the highest bidder for any of the properties. Luckily the highest bidder dropped out of one deal for lack of financing, and I was in second position, so I did come away with one signed contract. Not one of the properties has so far sold for less than the asking price, and one went for at least 50% higher.
It feels like a seller's market in these low-priced locations, because of the spirited competition from other buyers. But luckily for the buyers, the sellers (the banks) don't seem to have quite noticed yet, and they are still keeping prices low. Could it be the psychological pressure of the additional pending foreclosures looming over them? They may be wondering how long this buying frenzy can last. It's a good question. But right now there is not the slightest sign of it faltering. Mike Cromford.
STRONG DEMAND is what is causing this housing turnaround in AZ, CA and NV. It's no surprise. With all the incentives in place (tax credits, low down payments, higher conforming loan limits, interest rates below 5%, prices down almost 50% from the highs)… buyers have little reasons to wait and are running to buy, buy, buy.
The Spring Buying Season has Sprung with a BANG. And I expect to see a domino effect of depleting inventory and pressuring home prices upward…. stopping the downward trend by this summer!
Mark my words… you will kick yourself if you don't get off the fence NOW. Stop thinking of reasons to wait… and start asking yourself… how should you be spending your time right now??? (ei… Hunting the great deals in your backyard right now!)
And then call my Senior Consultants Jim or Andy to help get your foreclosure business into HIGH GEAR NOW… 800-310-7730 x2.
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