Have We Already Seen The Bottom Of The Real Estate Market?

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Many of the recent reports on the state of the real estate market offer a quick and dirty analysis designed to fit into a 30-second television spot or a short news article.

In addition, they tend to give a broad brush to the entire real estate market as opposed to the intricacies of a particular market.

So what is the answer to the question: Did you miss the bottom of the real estate market? The answer — it depends.

Information, statistics and historical data are more readily available on the Valley real estate market than the Rim Country.

However, there is value in following the Valley real estate market because the Rim Country tends to follow their trending in regards to home sales.

For the past two years, I have been following specific housing sales in Mesa, Scottsdale and outlying areas.

Here is what is happening of late.

The media reports generally focus on sales with a statistic on the median home price.

This is a valuable tool, however, if you do not track specific home sales, this barometer may be misleading.

For example, in Mesa, the median home price has diminished over the last two years.

What is missing from the median home price statistic is the quality of home you can buy. For example, the neighborhood you could buy in two years ago may command a 25 percent higher price today.

While the overall median home price has diminished, so has the quality of the home that today’s median home price brings compared to two years ago.

Another interesting factor is how many homes are on the market.

Two years ago, there were 80-100 homes for sale in a monitored parameter. Today, there are nine homes on the market in that price range.

In a condominium community near the Scottsdale airport, similar units are closing 51 percent higher than they sold for in March of 2011.

It would seem that the inner belt of the Valley is seeing higher sales prices on similar construction, but the overall median home price is being suppressed by other factors.

The other side of the coin is the community of Maricopa, south of Phoenix, where home prices may or may not have reached the bottom.

For example, today, you can buy a 4,547-square foot home for $135,000.

Granted, the previous owners have stripped the kitchen and fixtures, however, a little TLC could restore the home.

The recovery in Maricopa may be a long time coming, but it skews the overall median home price figures.

Although Rim Country real estate tends to lag Valley trends by six months or more, the Valley’s inner belt sales data provides a level of optimism for recovery of our local real estate market.

Ray Pugel is a designated broker with Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.

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