Fountain Hills 2nd Quarter Market Report-Ready NOW!
Maricopa County: Perhaps the best way to explain what is going on in the Maricopa County Real Estate Market is to quote the Cromford Report from July 2, 2011. The Cromford Report is a reliable source that tracks, among other things, data from the Arizona Regional Multiple Listing Service:
According to the current ARMLS data, 2,216 homes closed on June 30 across all areas and types, the largest total we have ever recorded for a single day. It beat the previous record set on June 30, 2004 by nearly 57%! Not only that, but the total for the calendar month of June was 11,141, also a new all time record for sales through ARMLS. We know that the total sales recorded by the counties may have been a little higher during the summer of 2005 because so many transactions were completed outside of ARMLS in those days (mainly new homes and FSBOs). However in June’s total we are not including the homes purchased at trustee sales which were very few in 2005 and likely numbered over 1,500 last month. However you look at it, June 2011 sales volume was enormous…
Shadow inventory? Foreclosure “tsunami?” According to the “experts,” we’re supposed to be right in the middle of what was predicted to be “the bigger wave” of foreclosures, with much doom and gloom forecast. But inventory is at an alarmingly low rate especially in desirable areas like Fountain Hills and the East Shea corridor. Prices are stabilizing and the wave is looking more like something out of a 1960’s beach party movie. While this certainly doesn’t spell the end of the housing crisis in Arizona, it does highlight what we’ve been saying all along…the Maricopa County real estate market is very resilient. Unless the federal government succeeds in mucking up our economy to a much greater degree, we have survived the worst and can begin to feel confident in our sunbelt real estate appeal, once again.
Fountain Hills: All indicators in the Fountain Hills real estate market are positive…..every last one! This is the first time in recent memory that we’ve seen:
- Inventory decreased in every category (homes, condos, land)
- Sales pace ahead of 1st quarter 2011 in every category
- Sales pace ahead of the 2nd quarter 2010 in every category
- Prices increase over 1st quarter 2011 in every category
Distressed Property Sales comprise 36% of the $89 million of sales closed during 2nd Quarter, 2011 in Fountain Hills. That’s a huge decrease from just 6 months ago at the end of 2010 when 50% of Fountain Hills’ residential sales were either Bank-Owned Properties or Short Sales (49% at the end of 2009) Currently, there are 36 bank-owned properties listed for sale in Fountain Hills, the smallest number we’ve seen in over two years…and one-half of what it was in October 2010.
To be fair, the local real estate market was feeling euphoric one year ago at the end of the 2nd quarter of 2010, when inventory was reduced and prices had risen drastically the previous 6 months. But, as most of us believe, this was more than likely an artificial market created by the incentives of the Homebuyer’s Tax Credit program. It is no secret that the 1st and 2nd quarters of each year are usually Fountain Hills’ busiest. And, we had a huge drop in business the second half of 2010 that resulted in an 8-year low in prices. However, we at Sonoran Lifestyle Real Estate are experiencing a very robust sales pace even this summer…with many more enthusiastic buyers than one year ago.
So, the next 6 months will officially tell us whether we have left the bottom of this market behind us. And, while the long climb out of the problems of the past few years will not be a steady, uninterrupted incline, we do believe that if you’re waiting for the “perfect time” to purchase your next home or investment property, that time is NOW!
A few words about “shadow inventory:” Across the Valley, we are hearing that the anticipation of a huge shadow inventory is a non-starter. First, it’s
important to understand the various forms of shadow inventory. Some experts consider it to be the foreclosed properties that are sitting vacant and off the market. Others use a broader definition as any property that is either headed for default, is in default or has been foreclosed and is vacant and off the market.
Those that believe this is a non-issue are—in our opinion—analyzing the market place from an informed, realistic position. Their comments generally include statistics that take into account the active sales pace of short sale properties that will remove the anticipated shadow inventory prior to foreclosure; they also take
into account properties that are purchased off the courthouse steps by investors that are either purchasing to hold or to fix and flip…creating a much more vibrant market than we saw several years ago when trashy default properties clogged the system. In Fountain Hills, we are seeing both of those dynamics in play. If a property is in decent shape and priced reasonably…it sells. Statistically, there are only about 25-30 properties that might be considered “shadow inventory” by the narrower definition. These properties are often plagued by prior title conditions (bankruptcy or actions for deficiency judgment); extreme hazardous conditions within the home (mold, etc.) While there may be other factors that negatively impact our local market, we don’t believe “The Shadow” is lurking around us.
Enjoy the attached reports. There is a lot of information in them, and we’re happy to help you analyze them for your own purposes or to send you more detailed reports such as our “Neighborhood Report” or some of the Cromford Reports that analyze both the local and valley wide market. We look forward to being of assistance should you decide that now is the time to buy or sell your next property.
Dori Wittrig
Posted by Dori Wittrig, Designated Broker, Sonoran Lifestyle Real Estate. For more information about the neighborhoods, homes, condos or land of Scottsdale or Fountain Hills, contact her at DoriW@SonoranLifestyle.comor by phone at 602-558-5901
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