Foreclosures and short sales are still driving the market in the Valley of the Sun area. This trend is expected to continue through 2009. If you are looking for the bottom of the market before making a purchase, you will need a crystal ball because no one knows when that will occur (or has happened) until months after it happens. However, it does appear that the Valley of the Sun real estate market is rebounding to some degree.
Sales are up from sales a year ago, according to the latest reports. In Phoenix, 1,290 single-family homes were sold last month compared to 461 in January 2008. Most of these sales (a whopping 77%) were from foreclosed homes. The “days on market” was down, with homes selling in an average of 78 days compared to 103 days a year ago. These figures indicate a change in the market. But, the bumpy ride is not over yet. Much depends on the availability of credit, how the new Stimulus Package affects consumer confidence and how quickly the economy recovers.
Some banks have placed a moratorium on their foreclosures, which has slowed the flood of foreclosed homes. This, however, is temporary. A new wave is expected in the next few months. The foreclosure market will keep prices depressed for some time.
Is buying real estate now a wise decision? The answer for those considering home ownership is a surprising “Yes”. Interest rates are at historic lows, hovering near 5% (good credit required). Prices throughout the Valley of the Sun are affordable. In some areas, house payments at these interest rates would be less than renting. Over the long haul, purchasing a home saves hundreds of thousands of dollars in living expenses. At the end of 30 years, you will be able to live rent free.
You may be thinking “but what about the decline in value?” If that is the case, I would like to point out that purchasing a home in today’s market is just that…purchasing a home. It is not an “investment adventure”. Real estate will recover. Home values will increase over the long term. The road to recovery is being laid out. Don’t miss out on your opportunity because of uncertainty. Further down the road, many people will be saying “I wish I had bought when prices were low.”
Next week, I will be posting a blog on short sale advantages for sellers and buyers. If you are a buyer or seller thinking about a short sale, the information presented may be helpful to you. Make sure to check back.
