Phoenix Housing Inventory Plummets

According to an ASU report released at the end of March 2012, inventory levels have dropped 42 percent and foreclosure sales are down 52 percent from the prior year.  Foreclosures and short sales now only make up 20 percent of total sales.

Arizona Foreclosure Rate Falls

The Arizona mortgage delinquency rate fell to 6.35 percent in the first quarter of 2012, down from 8.23 percent during same same period last(2011) year.  This is according to the Mortgage Bankers Association.  The actual foreclosure rate was 3.57% compared to 4.81 percent a year prior.

What does this mean?  Fewer homes going to foreclosure lessens the inventory of homes for sale at a discount.  This in addition to falling inventories of traditional and short sales coupled with rising demand means upward pricing pressures are back.

Residential Real Estate Bidding Wars Are Back

Home buyers are stunned to see the bidding wars for properties coming back.  I posted in my blog "You Heard it Here First" back in November that the numbers were stacking up for a boost in sales prices.  There were many buyers waiting on the sidelines to see a bottom and they have jumped in to the buyer 'pool' at the same, even as inventory levels continue to decline.  Sellers, seeing this, are holding back if they do not need to sell and that leaves very little existing inventory with prospective homeowners competing with investors. 

This is not just a local phenomenon here in the Phoenix/Scottsdale market but appears to have a widespread nation wide reach.  One index that measures the number of contracts signed to purchase previously owned homes rose in March  to its highest level in two years gaining to 12.8% from 4.1% according to the Wall Street Journal. 

My personal opinion is that this will not stop until rent rates to sales price ratios decline and investors start falling away.  However, that means that housing prices will be higher when that happens.  Most indices including the Case Shiller Index for the Phoenix are market indicate we are back at 2000 to 2001 pricing so we do have a little ways to go to reach long term trend lines.  The only thing to put restraint on the rapid appreciation is the employment picture, but even that is improving in our market.

Scottsdale to Add 4,400 acres to Preserve

The city of Scottsdale has announced that there are plans to add about 4.400 acres to the McDowell Sonoran Preserve.  This would bring the city to around the halfway point of a total goal of 34,000 acres in the McDowell Mountains and surrounding areas.