So what in the world has been going on lately??? Foreclosures are on the rise, seems we are experiencing that dreaded “double dip” which is keeping buyers on fences and investors out of our market- what has to happen before that turns around? We should see first where we were before we try to figure out where we are going next…
Based on the graph provided by The Cromford Report (please click photo for full articles from Mike Orr explaining our current market as well) :
- During the peak of our marketplace in 2005, we had seen annual appreciation rates from 16% up to close to 50%.
- During 2008; we saw a steady decline from just below 0% declining down to below –40%.
- During 2009; we saw our market do the exact opposite and have a steady appreciation throughout the year climbing us almost entirely out of the declining market.
- During 2010; “The Year of Hope” as dubbed by Mike Orr in January 2010; we saw our market have a huge increase in appreciation due to the Obama Tax Credit for Home Buyers. Unfortunately we now see that was an artificial demand and since it’s expiration, we’ve seen yet another decline and we are now back in the negative as of late August.
Fannie Mae and Freddie Mac have also stopped granting postponements to their borrowers in default working out either loan modifications or short sales, which is increasing our supply of Foreclosure Inventory. Seems contradictory to what our marketplace needs in order to recover.
Interest rates are still in their lowest in years- but there seems to be so much fear out there right now as a result of the lumps and bruises we’ve endured the last few years, those people in a position to purchase seem to be holding out to make sure that pricing isn’t going down further. Seems the last month we’ve stabilized and we are naturally correcting ourselves; but we do need to have our investors back in our marketplace to drive up demand again. The job market still seems strong in Arizona, which definitely helps.
Back before the craziness of 2004-2005; the average appreciation in Phoenix area had always been about 6% since the time I started in Real Estate in the early nineties. Much of that has a lot to do with the continued job growth overall in Arizona, cost of living and quality of life with our great weather. It’s just a matter of time before we get back to the normal 6% appreciation; especially as those borrowers re-enter our marketplace that lost their home to short sale or foreclosure in 2006/7—they are already candidates to purchase again. By next year, the demand will increase just to that because a huge percentage of homes lost went in 08/9.
For those of you hanging on to your homes because you are afraid to Short Sale and damage your credit; we are seeing more and more people get approved to Short Sale and repurchase immediately as long as they stay current on their mortgages, so they can take advantages of today’s low low rates and low low prices.
REMEMBER- THERE IS NO WAY TO KNOW WE’VE HIT OUR BOTTOM UNTIL ITS ALREADY PASSED! IF YOU NEED HELP WITH REAL ESTATE TO EITHER BUY OR SELL A HOME- CALL US TODAY AT 480-243-4242 OR CLICK HERE TO GET STARTED!