The “Golden Olympics”

If your like us you’ve been glued to the TV watching at least a few Olympic events and marveled at the talent of our many athletes. The intense competition probably comes down to preperation, genetics and luck. Preperation through the athletes’ years of training along with physical and mental conditioning. Genetics most likely through the natural gifts from their parents. This is especially evident in these Olympic sports. Imagine Lebron James attempting the pummel horse or Gabby Douglas at under 5′ trying to cover any of the basketball players. It’s only hundredths of a second between gold and silver medals.

The future of these young athletes will not be good or bad because of what happens at the Olympics, except for a few, like Michael Phelps. Their future will be good or bad based on the choices they make over time. The same holds true for decisions when investing in property, buying and selling a primary residence or deciding a short sale is necessary. Good sound decision making will help you achieve your goals.

Lorrie and I celebrate these young people and their futures. So let’s all cheer for the RED WHITE and BLUE! GO U.S.A.

Phoenix Housing Market Update. for August 2012

In the Greater Phoenix market active listings including AWC as of July 30^th were: 6.4% REO, 37.7% short sales & pre-foreclosures and 55.9% normal. Last year at this point we had 14.3% REO, 41.5% short sales and pre-foreclosures and 44.2% normal.

There has been a fall in the average $/SF for listings under contract since peaking around the end of April. Some areas have still been heading upwards, for example: Avondale, Buckeye, Chandler, El Mirage, Gilbert, Glendale, Goodyear, Laveen, Maricopa, Mesa, Queen Creek and Tolleson. The mix of homes under contract has changed in favor of smaller homes, with pending listings averaging 1,969 sq. ft. having been 2,002 on April 28. AWC listings have fallen from an average of 2,018 to 1,977 over the same period. The annual appreciation rate for $/SF across all areas & types exceeded 25% today. This is not because prices are rising at the moment, but because prices were falling this time last year.

New listings are still being added to ARMLS at a lower rate than last year. Today the 30-day total is 5.7% lower than July 26, 2011 which was 18.4% lower than July 26, 2010. Despite these declines inventory is starting to increase because of the lower sales rate. We do expect inventory to increase in the 4^th quarter.

Two years ago, single family homes represented 55% of the rental listings on ARMLS. Today this has increased to 68%.

New build homes are selling so fast that almost no builder specs remain and current build time is 7 months. This has become a go to area for investors to the point some builders will not sell to investors unless they agree to occupy the property for at least 1 year.

Land sales have been very strong with builders and investors buying every available large parcel especially along the 303 corridor in the Peoria area. This area includes the Master Planned development of Vistancia. The build out of Loop 303 is the key to unlocking the west valleys growth.

We hope you’re all enjoying the lazy- hazy days of summer.

Best,

Joe & Lorrie

New Build Homes In Phoenix

We think there is good value in new builds as many of them are now priced lower per sq. ft. than resales. The build time is usually 3-6 months and we feel you can see an immediate appreciation. The inventory of finished lots available for new home building is at an all time low. This is confirmed by MetroStudy who specialize in this data. Although you can still find incomplete subdivisions they are a tiny fraction of what is needed to build 2,500 homes a month, which is the immediate requirement.

 

We also think the lack of builders being able to find an adequate number of sub contractors will push new home prices higher. The subcontractors currently have a large number of vacant positions heavily advertised. The unemployed are NOT applying for those jobs in adequate number and those that do often leave the job within a week of starting because they find it too hard. Construction jobs are the fastest growing part of the AZ economy, but the employers are desperate because they are failing to fill their positions. Unlike 2004-2007 there were many foreign nationals that worked construction, but when Arizona passed the immigration bill SB 1070 many undocumented workers went back to their countries. They made up a good percentage of construction crews.

 

Look to new builds as a source for your next home.