The real estate market can swing in a heartbeat. Recently, inmaricopa.com spoke with several Realtors with experience in the Maricopa market. Are home sales up or down? What are agents doing to keep their business on the up side? Who is the market good for right now?
Deborah Farhat of Long Realty Alliance, Lisa Zaklan of Keller Williams Legacy One Realty, and Dawn Madden of Maricopa Properties offered their opinions on the Maricopa market and where it may be headed.
inmaricopa.com: How would you view the overall Maricopa real estate market right now – strong/average/weak?
Farhat: Slightly below average to weak, due to the high number of resale homes, very aggressive builder competition and slower than expected buyer turnout this summer season.
Zaklan: With over 20 months of inventory on hand, I would consider the market to be weak for sellers and oversaturated. However buyers have many options to choose from. Other similar outlining areas of the Valley, like Queen Creek, are experiencing the same levels.
Madden: Contrary to popular belief, there is no ‘strong/average/weak’ marketplace for real estate. There is only a buyers’ market, sellers’ market or even market. Right now we are in a strong buyers’ market, meaning there are many more options for buyers than usual. If you are even thinking of purchasing a home, now is the perfect time to do it as the competition for the best price per square foot with the best amenities is happening now.
inmaricopa.com: Have you seen builders selling for less than what people paid for homes a year ago?
Farhat: Yes, some builders have lowered their base pricing from a year ago, but the changes have been in smaller increments, generally a few thousand dollars at a time compared to last summer’s larger more dramatic price drops.
Zaklan: Yes, I have seen an overall slight decrease in builder prices from last summer, just the same as in the East Valley. Builder incentives are still just as strong and attractive as a year ago, and resale sellers are having a rough time competing with the builders.
Madden: Builders are pricing their homes at whatever it takes to keep selling in this buyers’ market. Unfortunately, there are many people who purchased their homes when the market was still a sellers’ market and the prices were increasing weekly if not daily. As such, there are several hundred people in Maricopa that purchased their home at a higher price than the builders are selling their base homes as of today.
inmaricopa.com: When do you think the local real estate market will turn around?
Farhat: Estimated to be two to four years. It will depend largely on two factors coming to pass: The first factor is builders closing out their incentives north of the tracks and east of White and Parker Road. Once this happens, we will see three more distinct areas of town (1. north of town – resale only and easiest for commuters), (2. east of town – new construction), (3. south of town – new construction). Homes south of town will become more desirable once we get the railroad track work around in place and the Maricopa Town Center starts to build out. People need to ‘see’ it to get excited.
The second factor is harder to estimate and that is foreclosures. It is difficult to determine how many homeowners will be financially impacted by the changes in their ARM (Adjustable Rate) and Option ARM (flexible payment) mortgages. At this time, there are approximately 50 homes listed on the MLS (Multiple Listing Service) in the city of Maricopa that are bank foreclosed homes.
Zaklan: I would estimate around 2009, based on new trends for outlining cities and the current regional inventory. Time is needed for a few more builder close outs to occur, and for lender owned properties to close. There are definitely more foreclosure signs evident since the beginning of this year and resale sellers are having a tough time competing with these also.
Madden: The thing to keep in mind is that Maricopa, as a whole, is still having the same number of homes sell per month as back in 2005. According to the MLS, in June of 2005 there were 62 homes sold, June of 2006 there were 65 homes sold, and in June of 2007 there were 69 homes sold within the city of Maricopa alone. These numbers don’t even take most of the builder’s homes into consideration either, which would mean the City is actually having more homes sold than portrayed.
The reason it seems as though the market has slowed down is that there are now five to six times the number of homes on the market than there were back in 2005 which makes the supply much greater than the demand. When that happens, pricing wars ensue. Right now, builders are running the market here in Maricopa as it’s their oversupply of homes that are keeping all home prices (new and resale) low. I believe the market will become more of an even market once the supply is down a bit which should happen late fourth quarter of 2007 to first quarter of 2008.
inmaricopa.com: What is unique about the Maricopa real estate market compared to other cities in the Phoenix area?
Farhat: The high number of concentrated builders/new construction homes. Most cities that are concentrated in the Phoenix area have distinct and separate markets where builder pricing doesn’t impact their resale market. In the city of Maricopa, builder pricing has a direct impact on our resale market. The majority of the buyers that come to Maricopa are currently purchasing new construction or ready-to-move-in builder spec homes.
Zaklan: Price point is a definite distinction as is with some of the other outlining cities in Pinal County. Maricopa offers very well-designed subdivisions with community activities, especially Province which is recognized nationally and has helped put Maricopa “on the map”.
Madden: Maricopa is still a new city that is experiencing a tremendous amount of growth or hyper-growth as it is called. We have growing pains that established cities do not encounter any longer. Knowing these obstacles and what is being done about them is a huge selling point for the City. Being able to talk about the City and what is being done about these obstacles is something that needs to be done prior to ‘selling’ a home here in Maricopa.
The other thing unique to Maricopa versus more established cities is that we are still competing with the builders. When working with potential buyers, it’s important to stress to them the pros and cons of buying a brand new home and a resale home as the number on the price sheet is not necessarily what you end up paying once you add in landscaping, décor, etc. to a new home.
inmaricopa.com: What do you need to do now as an agent to keep your business going strong?
Farhat: Continue to market heavily on the Internet to attract buyers to our area. For new listings, consulting with prospective clients to go over market conditions, the competition and all of the options available to them are key. Become a listing agent for bank foreclosed properties as part of the inventory in order to stay diversified.
Zaklan: Creative marketing and target marketing are imperative for listings, as well as aggressive pricing. Product knowledge and negotiation skills are imperative for assisting buyers, especially with the array of choices. Strong communication with both is a must.
Madden: Educating my prospects and clients is one thing I have always done, but it is even more important in today’s environment. Buyers need to be educated on the entire purchase process as well as all of the options for the homes that are currently on the market and all the different communities within Maricopa. Sellers need to be educated on the entire selling process as well as what a buyers’ market means for them depending on their situation. I price homes to sell not just to list them. This has built a solid reputation for me throughout the city of Maricopa. A solid reputation is one of the best marketing tools that any realtor can have.