The Phoenix real estate market might be starting to find a long trough in home values. This means two things:
- Home values are starting to stabilize
- Home values are going to remain stagnant for some time
I believe the market is in the initial phases of finding a so called ‘bottom’ and we could be on the cusp of seeing home values starting to stabilize. In some of the hardest hit areas of the valley where prices have fallen 70%, properties are selling fast with multiple offers. There are many investors and secondary home buyers that are paying cash, which is helping the appraised value of comparable properties. Also, if lending will loosen up a little bit and find a happy median between two extremes, we could really start to see more qualified buyers enter the market.
On the flip side, there are a lot of homeowners that are under water and are in preforeclosure. I believe this trend will continue for another 16-24 months which will more than likely keep any appreciation of home values at bay.
For first time homeowners, it is a great opportunity to take advantage of a $8,000 credit from the Gov. If you are an investor, cash flow is back for rental properties, but requirements of a minimum of 25% down is a little hard to swallow.
A key factor for many secondary home buyers and people looking to upgrade is to take advantage of the low interest rates. With so many dollar bills being printed, it is only a matter of time before inflation sets in and interests rates begin to creep up. I would expect this to happen by 4th quarter 2009 and into 2010.
{ 2 comments… read them below or add one }
The bottom has hit but what about the foreclosures put off by the Bush Admin. in Nov? All those homes should start foreclosing here this month or the next couple months. Once those hit I think we may see another dip in the real estate market.
I think it is too early to tell if we’ve actually bottomed. There are a lot of mixed signals. One positive is that inventory has reduced; however, one negative is that pricing is stuck in decline and we haven’t seen a stop at this point. I think that next quarter we will begin to have clarity.