West Valley Market Trends
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Transcript of West Valley Market Trends
West Valley Market Update
MIKE ORR: Founderwww.cromfordreport.com
© 2011 www.cromfordreport.com
March 15, 2011
Major Trends - Positive
• Economy & job situation improving• Low prices stimulating stronger demand for homes– Growth in demand is coming primarily from investors
• Buy & hold strategy growing in importance• Great time to be a landlord– Low purchase price– Rents steady, plenty of tenants– Excellent cash flow
• Foreclosure wave now well into a long slow decline• Supply has been declining since late November 2010
© 2011 www.cromfordreport.com
Major Trends - Negative
• Strong shift from ownership to rental occupancy• Finance difficult for would-be owner-occupiers• More loans now underwater – Average sales prices down nearly 13% since June 2010
• Arizona population peaked in 1Q 2009*• Out-migration started late 2007*– Significantly affects demand in south and west inner valley
• Maricopa has 206,000 fewer people than we thought
* Source = Marshall Vest, University of Arizona
© 2011 www.cromfordreport.com
Pricing
Supply
Demand
Foreclosures
Where Has the Foreclosure Crisis Hit Hardest?
More Than 35% of Single Family Homes Foreclosed Since 2006
More Than 20% of Single Family Homes Foreclosed Since 2006
Fewer Than 2% of Single Family Homes Foreclosed Since 2006
Short Term Outlook
• Overall demand now outpacing supply• Downward pricing pressure eased• Investor demand is key to low-end market• Signs of recovery above $300,000 • Continued weakness in areas with highest
population declines
© 2011 www.cromfordreport.com