Realtors say local market stable

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What is the market compared to a year ago?

InMaricopa conducted a Q&A with several five local Realtors.

Dawn Madden: Supply and demand are starting to even out compared to a year ago when there was a much higher supply than demand.

Sandra Mitsis:A year ago, investors were coming in here and picking up houses in the $50,000 to $60,000 range; now they are paying closer to the $80,000 to $100,000 range when buying short sale or lender owned. Banks are holding on to foreclosures a little longer now in order not to saturate the market, thus prices have stabilized. You can still catch a great deal here and there if you are willing to put in some sweat equity.

Suzie Rotter: Sales are a little slower even though prices are lower.

Vicky Ten Hoven: I think the market has picked up compared to a year ago. We are seeing multiple offers on listings in a few days. Even during the summer which is typically slower we have been very busy.

Rita Weiss: At this time in 2010, there were 1,653 homes sold in Maricopa, including 650 lender-owned properties and 450 short sales. This year, we have seen an 18.1 percent increase, with 1,952 houses sold, of which 819 were lender-owned and 413 short sales. Now what changed is there have been 182 HUD sales so far this year. There has been a marked positive trend over the last 11 months. Indeed, home sales around the state have reached a six-year high and represent the third highest sales figure in 10 years. The sales figure, though, must be tempered by the pricing, which has dropped throughout the state and is particularly pronounced in Maricopa. This is a good and bad thing. It is good for buyers, but bad for existing homeowners.

What impact do snowbirds and second-home buyers have on the local market?

Madden: There are quite a few second-home buyers purchasing in Maricopa right now. They are usually buying homes under 2,500 square feet, which is depleting the supply of those sized homes.

Mitsis: Snowbirds and second-home buyers bring money into our town and surrounding areas every winter. Restaurants are busier, the golf course has more people teeing off, supermarkets can count on higher sales, home owner association fees are being paid, and yards are being maintained — oftentimes by hiring landscapers.

Rotter: They have a positive impact. They have pride of ownership in their homes and they use local businesses to handle the upkeep of those homes.

Ten Hoven: Winter visitors and second-home buyers are a huge percentage of the buyers. They can get so much home here for the price compared to anywhere else.

Weiss: The snowbirds have continued to flock to the southwest, particularly Arizona. That is because thousands from the northern parts of the country seek our warmer winter temperatures and especially those who have lived or live in Canada. More importantly, a large percentage of investors have seen fit to continue seeking deals as price levels continue to erode and they wish to take advantage of the opportunities. According to the Arizona Regional Multiple Listing Service, the metro Phoenix median prices have dropped to $109,900, with Maricopa pricing running at roughly 70 percent of that. That means investors are particularly attracted to Maricopa. I have also noted a marked trend toward investors “fixing and flipping” their properties. That translates to a much shorter purchase to close period for home buyers, who have been forced to wait months as the short sales cycle through.

What will happen to property values in the fourth quarter? 2012?

Madden: Property values in most areas are not depreciating any longer but this does vary by community. I believe that the fourth quarter of 2011 will continue to stay steady in the pricing. In 2012, though, I believe that property values will actually start to appreciate just a little based upon the fact that supply is dwindling while the demand is still strong.

Mitsis: Home values have pretty much hit rock bottom in our community.

Home sales in the fourth quarter may slow down as we enter the holiday season, but values themselves will remain the same. In 2012, until our economy improves and Americans feel secure in their jobs continuing, home prices will stay where they are today. I don’t see values begining to rise more than 2 to 3 percent per year until we are back to no more than 5 percent unemployment rate.

Rotter: Hard to speculate.

Ten Hoven: I expect property values to go up in the fourth quarter of this year — we are already experiencing it.

Weiss: This is a good news, bad news type answer. The number of pending foreclosures continued on a decline and is expected to drop further by the end of the year, after a high was reached in November 2009. Unfortunately, banks and mortgage companies are aggressively unloading their remaining toxic assets (those properties homeowners have returned to their lenders). However, because of the “robot” signing allegations, which are illegal, the banks have been forced to put a hold on most foreclosures. That is why inventory is down for REOs (leander owned). What is particularly distressing about distressed sales is that the figure represents a large percentage of overall sales.

What are the three biggest issues facing the Maricopa real estate market?

Madden: First and foremost would be the stigma regarding purchasing homes throughout Arizona based upon the housing market crash of just a few years ago. The second issue would be that lending has tightened their reigns as far as who they will lend to overall. The third issue is the overall economy in the United States in that there is less disposal money, which makes it more difficult for people to save for a home.

Mitsis: The lack of local jobs, no entertainment for our youth, limited shopping. Our citizens should have the opportunity to work within their own community instead of having to drive to Chandler or Tempe. Not that the distance is far, but it is still at least an hour out of every commuter’s day. Pre-teens and teenagers have little to do. Unless they are involved in sports or drama, they have nowhere safe to hang out and be kids.

Rotter: We need to grow our market with more new homes, use up the shadow inventory of foreclosures, and the lack of commercial enterprises to support the community.

Ten Hoven: I feel the biggest issues facing the Maricopa real estate market are having inventory for the buyers. Short sales continue to be very lengthy in response time and people that would be willing to sell are still finding themselves upside down in their properties.

Weiss: 1) The biggest factor affecting the market is the inventory of additional homes on the market, which has been steadily declining. 2) With prices reaching what has to be close to a bottom, the demand from investors is increasing, while the supply is finally decreasing. This has also means that traditional sales, albeit at a five-year low in pricing, are increasing. 3) Finally, there has been an increase of HUD homes. That increase is undoubtedly due to the fact there are so many failed government-backed mortgages (i.e. VA, FHA, Fannie Mae and Freddie Mac) that have led to the federal government getting into the business of owning residential real estate.

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