Metro Phoenix Economic Snapshot presented by Kelly Karbon

WeallknowtheValley’srealestatemarkethasbeenvolatileoverthelast5+years.Thegoodnewsisthingsarechanging.Distressedhomesaredownapproximately75%fromlastyearandtheactualsupplyofhomesisbelowthatofa“normalmarket”.TheValleyispositionedforacomeback.Notacomebackof2005proportions,butastable,steadycomebackwhichwewillwelcome. Keepinmindrealestateislocal.Whatyouhearnationallymaynotreflectwhatisactuallyhappeninginyourneighborhood.RememberwhenArizonawasreaching47%appreciationinoneyear,mostofthecountrywasnowherenearthatlevel.Thesameconceptisvalidagain.Arizonawas#3lastyearforforeclosuresanddistressedpropertiesbehindFloridaandNevada.Wearenow#27!Wearemovingrapidlyintherightdirection.Pleasestudythisinformationandfeelfreetopassitontoanyoneyouknowwhomayneedhelpdecipheringourcurrentmarket.Weallneedtoknowwhatourpropertyvalueisandwhereitisgoing.Thisisvalidwhetheryouarebuyingorselling.Let’sdiscussyourpersonalsituationandgoalsandcomeupwithaplan. IamveryexcitedaboutthepositivemovementArizonahashadandlookforwardtohelpingyougetthemostvalueoutofyourhome.

Jeannine

JEANNINE BARTNICKICRS,GRI,ABR,SRS,e-PRO,RSPS,CDPE,CLHMS

Certified Luxury Home Property SpecialistCertified Residential Specialist

[email protected]

senior sales & marketing consultant

If your home is currently listed, this is not a solicitation for that listing. ProducedbyDesertLifestylePublishing•480.460.0996•www.DesertLifestyle.net

2011 Sales Statistics By CommunityCommunity Average DaysOn List/Sell # SalesPrice Market PriceRatio Closed

Ancala........................................$1,028,816................. 142..................93%..........................39

Bellasera........................................$441,157................. 139..................95%..........................19

DCRanch......................................$834,211................. 170..................95%.........................124

DesertHighlands.......................$1,283,186................. 277..................90%..........................18

DesertMountain........................$1,273,481................. 429..................88%.........................106

EagleMountain............................$515,914................. 193..................94%..........................27

Estancia......................................$1,973,181................. 294..................88%..........................11

FireRock......................................$1,151,845................. 271..................92%..........................24

GaineyRanch..............................$790,592................. 186..................93%..........................21

Grayhawk.....................................$526,555................. 122..................96%.........................142

HiddenHills....................................$664,171................. 133..................96%..........................32

IronwoodVillage..........................$337,443................. 105..................97%..........................44

LegendTrail...................................$507,262................. 150..................95%..........................51

McCormickRanch.......................$442,812................. 135..................96%..........................24

McDowellMountainRanch........$484,628................. 114..................95%.........................218

Mirabel..........................................$947,815................. 331..................89%..........................52

ScottsdaleMountain...................$639,893................. 157..................95%..........................40

ScottsdaleRanch.........................$431,296................. 112..................96%..........................77

Sincuidados..................................$771,923................. 184..................94%..........................13

Silverleaf.....................................$2,173,735................. 353..................86%..........................46

Stonegate.....................................$475,787................. 171..................94%..........................51

Terravita.........................................$425,710................. 142..................95%..........................76

WhisperRock.............................$1,866,900................. 667..................87%...........................5

Winfield..........................................$468,014................. 196..................96%..........................17

Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.(Single-Family Residences)

2011 Average Sales Price By City

Statistics gathered from ARMLS. All information deemed reliable but not guaranteed. (Single-Family Residences)

Glendale

Phoenix

Mesa

Peoria

Tempe

Gilbert

Litchfield Park

Chandler

Cave Creek

Fountain Hills

Scottsdale

Carefree

Paradise Valley

$117,597

$129,482

$139,952

$331,848

$405,408

$479,407

$682,714

$1,316,573

$190,588

$168,879

$194,236

$164,317

$199,320

TherecoveryintheMetroPhoenixhousingmarketstartedquitegentlyinSeptember2011butgraduallygrewinstrength,andbythespringof2012itwasrunningattopspeed.Theimmediatelyobviousimpactwasastrongriseinpricing,infactagreaterpercentagerisethananyothermetropolitanareaintheUSA.Alookbackat2012comparedwith2011showsusthat:•Theannualaveragepricepersq.ft.rosebyover20% from$81.59to$98.24•Theannualaveragesalespriceincreased23%from $156,774to$192,549•Theannualmediansalespricejumped27%from$110,000 to$140,000 Inventorywaslowthroughout2012,causingintensecompetitionamongbuyers.Thiswasparticularlytrueatthelowerendofthemarket.Buyerswithcashheldasubstantialadvantage,sincetheycouldimpresssellerswiththefactthattheirofferdidnotdependonobtainingapprovalforaloanorasatisfactoryappraisal.Forthehigherpriceranges,supplyanddemandweremorebalanced,butpricesincreasedinmostareasasconfidencereturnedtothemarket. Salesvolumeswerelowerin2012than2011,butthiswaslargelyduetoashortageofaffordablehomestobuy,notbecauseoflackofdemand.Atthestartof2011,nearlyhalfofhomespurchasedwerelender-ownedforeclosures,butbytheendof2012thesehaddroppedtolessthan13%ofsales.Meanwhilenormalsalesgrewfromjust29%ofsalesinJanuary2011to61%inDecember2012.Shortsalestookoverfromforeclosuresasthepreferredmeansofresolving

homeloandelinquency.Theyconstituted21%ofsalesatthebeginningof2011,and26%bytheendof2012. Delinquenthomeloanswererunningashighas16.3%inArizonaasrecentlyasFebruary2010.ByOctober2012thishaddroppedto7.7%,accordingtoreportsbyLenderProcessingServices.Thisimprovementisthelargestofanystateinthenation.Arizona’snon-judicialforeclosureprocesshasallowedittoeliminatedelinquentloansatamuchfasterpacethanstateswithajudicialprocess.Thisisbadnewsfortheborrowersinvolved,butgoodnewsforthemarketsincewenolongerhavetheimpendingthreatofsignificantdistressedinventorycomingontothemarket. Manyfamilieswholosttheirhomesthroughforeclosureandshortsalesin2008and2009arenowplanningtostoprentingandgetbackintohomeownership.Thiswilladdtothe2013demandforhomestoown,ratherthantorent. Investorshavebeenaverysignificantpartofthedemandsinceearly2009andthisdidnotchangein2012.Whatdidchangeisthatmorepropertieswerepurchasedbylargemulti-nationalinvestorsinsteadofsmallerlocalplayers.Nowthatpricinghasrespondedtotheexcessdemandoversupply,weexpectdemandfromthelargeinvestorstoslowlydissipatein2013. Thenewhomemarkethassprungbacktolifeafteraprolongedhibernationbetween2008and2011.In2012,demandfornewhomesoutpaceddevelopers’abilitytobuildthem.Ashortageofskilledconstructionworkersandlimitedfinishedlotsinbuilders’ownershipmeantthatthegrowthinnewsaleswassomewhatstifled.Neverthelesswesawnewhomesalesgrowby49%between2011and2012despitesignificant

increasesinprices.Developersarenowbuyingupnewlandandfinishedlotstosetthemselvesuptosupplymorehomesin2013.Withtheexpectedincreaseinpopulationthough,thisisnotexpectedtobeenoughtomeetthecomingdemand. OveralltheMetroPhoenixhousingmarketisinastrongerpositionnowthanithasbeensincelate2005.Manythemesfrom2012willprobablycontinueinto2013asthemarketheadsbacktonormal.Foreclosuresandshortsalesareexpectedtodecline.Newhomeandnormalre-salesarelikelytoincrease,whilelowinventorywillcontinuetobeakeyfactorincausingpricestomovehigher.Withnosignificantsourceofnewsupply,wedon’tseeinventoryrisingbacktonormallevelsforaverylongtime. Inthecurrentmarket,homesareeasytosellbutsometimesbuyingcanbeachallengeduetocompetitionfromotherbuyers.Evenso,owningahomeisfinanciallymuchmoreattractivethanrentingbecauseinterestratesonhomeloansareunusuallylowandhomepricesarestillcheapbyhistoricalstandards,especiallywhencomparedwithrentalrates.Withtheinventoryofhomesforsaleexpectedtostaylowforsomeconsiderabletime,buyersarelikelytohavetheirpatiencerewardedwithcontinuedstrongappreciation.Mostofthosewhoboughthomesin2011havealreadyseenverystronggrowthinthevalueoftheirhome,andbythetimewereach2015wearelikelytobesayingthesameaboutthosewhopurchasedhomesbetween2009and2013.

AuthorandstatisticianMichaelOrristheDirectorofRealEstateStudiesatASU’sW.P.CareySchoolofBusiness,andPrincipalofTheCromfordReport.

IN THE NATIONAL SPOTLIGHT Aswe’veturnedthepageonanotheryear,thenationaleconomycontinuesitsmodestrecovery.Optimismtingedwithuncertaintyseemtobetheprevailingsentiments.Althoughtheworsteffectsofthe“fiscalcliff”havebeenaverted,thereisstillawait-and-seeattitudeamongconsumersandemployersregardingtaxationandfederalspendingpolicies. Corporationsareflushwithcash,butarewarytospendonhiringorotherbusinessexpendituresuntilfurtherclarityontheeconomy’spathisavailable.However,onceCorporateAmericagainsconfidence,thetrillionsofdollarsandrecordprofitsthey’resittingoncanbeinjectedintothemarketplacethroughemployment,manufacturing,andotherbusinessinvestment. ThereisadirectcorrelationbetweenanincreaseinconsumerconfidenceandanincreaseintheGDP.Whenconsumersarecomfortableandconfident,theyspendmoney,pavingthewayforbusinessexpansion.Forconsumerstofeelconfidentin2013,thereneedstobeacontinuedimprovementinthefinancialmarketsandhomevalues,alongwithaprogressiveloweringoftheunemploymentratecoupledwithaveragewageincreases.TheGDPisexpectedtogrowatapproximately2%in2013,aboutthesameaslastyear. Ourfinancialmarketsenjoyedarobust2012withtheS&P500finishingwithjustundera12%growth.Whiletherecentlyenactedtaxlawchangesmaydampensomeoftheenthusiasmininvestingforsome,manymarketforecastersareprojectinga6%-12%growthfortheS&P500thisyear. Thebrightspotintheeconomyin2012wasthehousingmarket,aslowmortgageratesandaffordablehomepricesnationwidekepthomessellingatabriskpace.Fortunatelythattrendisexpectedtocontinuein2013.Infact,someareasareexperiencingsuchahousingshortagethattheconstructionindustryisstrugglingtomeetdemand.ThatisespeciallytrueinourArizonamarket(seetheResidentialRealEstatearticle.) Kiplinger.comforecastsamoderate,butsteadyjobgrowththrough2013withaprojectedannualtotalofanaddedtwomillionjobsbyyearend.Similarly,theunemploymentrateisprojectedtodriftdowntoabout7.5%vs.7.8%attheendof2012. Mosteconomistsareexpectinganoverallimprovementinournation’seconomic

healthin2013.WayneStutzer,SeniorVicePresidentandFinancialConsultantforRBCWealthManagement,explainsthecyclicalnatureoftheeconomy.“Thetopofthemarketwasin2006.Today,2013istheseventhyearofthetypicalseven-yeareconomiccycle.We’realmostoutofthewoods.”Thewildcardmaybehowthenewtaxlawsimpacttheeconomyasthehigh-incomeearnerstargetedwithtaxincreasesalsoaccountforhalfofournation’sconsumerspending.Weareexpectingslowbutencouragingprogressinalloftheseareasin2013.Stutzercontinues,“Ifthingsgowell,then2013willberememberedastheeconomicyearthatsetthestageformuchbetteryearstocome.”

ARIZONA HEATS UP AlongwithNevada,Arizonawasgroundzeroforthehousingmeltdown,plaguedbyhighforeclosuresandhighunemploymentduring2006-2010.However,Arizonastagedastrongeconomiccomebackin2012,boastingthebesthousingmarketinthenation. “AsofSeptember2012,Arizonarankedfifthamongstatesforjobgrowth,andtheMetroPhoenixareawasfourthamonglargemetropolitanareas,”saysLeeMcPheters,ResearchProfessorandDirectoroftheJPMorganChaseEconomicOutlookCenterattheW.P.CareySchoolofBusiness.ThisisanextraordinaryimprovementfromArizona’slowpointin2009whenArizonafellfromanenviablejobgrowthrankingofsecondin2006,toadismal49thofthe50statesin2009.“Arizonaisexpectedtoadd60,000jobsin2013.Weshouldfinallydipbelow8%unemploymentin2013–downto7.6%.” Arizona’seconomicgrowthhashistoricallybeenstokedbyencouragingbusinessesandpeopletomovehere.Arizonaoffersadesirableclimate,affordablehousing,andagrowingbusinessenvironmentwithreasonablestatetaxrates.ArizonastandstobenefitfromCalifornia’srecentlyenactedProposition30whichraisesanalreadyhighstatesalestaxevenhigher,whilesignificantlyraisingincometaxesonindividualsmaking$250,000ormore.TheGreaterPhoenixEconomicCouncilhasdoubledtheireffortstoattractCaliforniabusinessesandtheiremployeestoArizona.ThesenewCaliforniataxlawchangesareexpectedtosignificantlyincreasepopulationflowstoArizona’sadvantage. ElliottD.Pollack,CEOoflocaleconomicconsultingfirmElliottD.PollackandCompany,notestheimportanceofmigration

toourstate.“Intheabsenceofthefiscalcliff,thingsshouldcontinuetoimproveoverthenextseveralyears.By2015,thingsshouldbenormalized.AsIliketosay,we’reonlyonedecentpopulation-flowyearawayfromtheissuebeingresolved.” MetroPhoenixhasrisenfromitshousingmeltdownwithencouragingjobgrowthledbyahousingboomthathasnowcausedaresidentialhousingshortage.Homebuildersaresteadilydustingofftheirequipmentandbuildinghomestomeetdemand.NewhomesalesinjectfreshlifeintotheArizonaeconomyandtaxbase.ThejourneytowardcontinuedeconomicgrowthandprosperityforArizonaseemstoonceagainbeheadingdownthefamiliarpathofbuildingandsellinghomestomeetincreasingdemand.

G E N E R A L E C O N O M I C S NA P S H OT

R E S I D E N T I A L R E A L E S TAT E

2013 ECONOMIC FORECASTS

GDPGROWTH2% growth in ’13,

about the same as last year. . .

INTERESTRATESLittleornoincrease

inshort-termratesin‘13. . .

BUSINESSSPENDINGAbouta4%gainin’13,

halfof‘12’space. . .

HOUSINGSALESUp8%,helpingGDPin’13

. . .TRADEDEFICIT

Wideningby2%in’13,afteraslightdipin’12

. . .UNEMPLOYMENT

Headingtoabout7.5%bytheendof‘13

. . .INFLATION

Slightlyhigherthisyear,2.3%. . .

ENERGYOiltradingat$90-$95/barrel

throughearlyspring. . .

RETAILSALES5%growthin’13

afterstrongholidaysales

Source:TheKiplingerLetter

ByMichaelOrr

ACTIVE LISTING COUNTSGreaterPhoenix-ARMLSResidential

SALES PER MONTHGreaterPhoenix-ARMLSResidential-MeasuredMonthly

MONTHLY AVERAGE SALES PRICE PER SQUARE FOOTGreaterPhoenix-ARMLSResidential

KELLY KARBON

[email protected]

KELLLY KARBONScottsdale ~ Paradise Valley ~ PhoenixFountain Hills ~ Cave Creek/Carefree

Kelly Karbon has earned a reputation

for professionalism, and integrity, attention to

detail and confidentiality. She is considered

a consummate professional.

Working with clients who desire a higher level

of service, knowledge, and experience in real estate

and believing no two clients are alike and every

home is unique, Kelly takes great pride in offering

concierge based services and innovative options

tailored to meet the individual needs,

wants and desires of her clients.

If you are in the market to sell or purchase luxury

real estate in Scottsdale, Paradise Valley,

Carefree/Cave Creek, Phoenix, or Fountain Hills,

call or email Kelly for a confidential,

no-obligation consultation.

If your home is currently listed, this is not a solicitation for that listing. Produced by Desert Lifestyle Publishing • 480.460.0996 • www.DesertLifestyle.net

2012 Sales Statistics By CommunityP O P U L A R N E I G H B O R H O O D S I N S C OT T S D A L E

Community Average Days On List/Sell #

Sales Price Market Price Ratio Closed

Ancala ..........................................$1,184,433 .................156 .................. 96% ..........................37

Bellasera ..........................................$511,496 ..................76 ................... 97% ..........................29

Candlewood Estates .....................$762,778 .................149 .................. 95% ..........................18

DC Ranch.....................................$1,007,616 .................141 .................. 95% .........................118

Desert Highlands .........................$1,643,402 .................349 .................. 90% ..........................23

Desert Mountain ..........................$1,338,941 .................413 .................. 89% ..........................96

Eagle Mountain ..............................$528,672 .................115 .................. 97% ..........................30

Estancia ........................................$2,499,250 ................210 .................. 80% ...........................8

FireRock ........................................$1,208,519 .................213 .................. 92% ..........................26

Gainey Ranch ................................$794,150 .................220 .................. 92% ..........................30

Grayhawk .......................................$572,259 ..................82 ................... 96% .........................133

Hidden Hills ......................................$617,407 .................126 .................. 96% ..........................28

Ironwood Village ............................$355,185 ..................85 ................... 97% ..........................32

Legend Trail .....................................$567,455 .................128 .................. 96% ..........................60

McCormick Ranch .........................$421,856 ..................82 ................... 97% ..........................63

McDowell Mountain Ranch ..........$513,130 ..................73 ................... 97% .........................205

Mirabel .........................................$1,144,459 .................271 .................. 92% ..........................28

Scottsdale Mountain .....................$607,771 .................141 .................. 96% ..........................52

Scottsdale Ranch ...........................$544,665 .................109 .................. 95% ..........................95

Sincuidados ....................................$819,933 .................201 .................. 95% ..........................15

Silverleaf .......................................$2,031,150 .................258 .................. 92% ..........................35

Stonegate .......................................$521,957 ..................95 ................... 97% ..........................63

Terravita ...........................................$458,572 .................147 .................. 96% .........................103

Troon North ......................................$749,227 .................171 .................. 95% ..........................97

Troon Village ...................................$798,551 .................190 .................. 94% ..........................87

Whisper Rock ...............................$1,748,375 .................236 .................. 91% ...........................8

Winfield ............................................$557,957 .................123 .................. 96% ..........................14




Glendale

Phoenix

Mesa

Peoria

Litchfield Park

Tempe

Gilbert

Chandler

Cave Creek

Fountain Hills

Scottsdale

Carefree

Paradise Valley

$147,050

$169,964

$173,024

$363,245

$421,963

$512,231

$206,811

$213,566

$227,122

$194,483

$231,107

$694,947

$1,345,837

Glendale

Phoenix

Mesa

Peoria

Tempe

Gilbert

Litchfield Park

Chandler

Cave Creek

Fountain Hills

Scottsdale

Carefree

Paradise Valley

$117,597

$129,482

$139,952

$331,848

$405,408

$479,407

$682,714

$1,316,573

$190,588

$168,879

$194,236

$164,317

$199,320


BestHomesInScottsdale.com

Metro Phoenix Economic Snapshot presented by Kelly Karbon

Documents

Transcript of Metro Phoenix Economic Snapshot presented by Kelly Karbon