July 2011 Real Estate News
Happy Independence Day! What’s the Buzz? It feels a lot like 2005 – only in reverse. Going into the second half of 2005, supply rose dramatically but no one seemed to take any notice. There was a widely believed myth that prices could never go down. Between March 31, 2005 and June 30, 2006, active listings rose from 8,394 to 45,729 (up 445%) creating a huge glut of homes for sale. Yet average sales prices continued to rise throughout this period, up 28.6% from $146.98 to $189.05 per sq. ft. Meanwhile demand fell 16.5%, with sales per month dropping from 8,490 to 7,093. It was as if everyone believed the laws of supply and demand no longer applied. Of course we found out by 2007 that supply and demand really did matter, and the bubble burst explosively in 2008 causing untold damage to the economy and family finances. It really boils down to a question of timing. Supply and demand do control pricing, but in real estate there is a very long delay between cause and effect. That delay (timing) can be extended even further by sentiment. In 2005 sentiment was off-the-charts positive; “irrational exuberance” ruled and caused people to make decisions that in hindsight look positively insane. Not just homeowners and developers, but especially lenders and the investors who fueled the credit surplus. The complete opposite seems to be happening now. Sentiment is very negative. Everyone seems convinced that prices can only fall further, yet demand is rising – and supply has been falling like a rock dropped off a cliff for 6 months now. It comes down to one simple thing: people believe what they want to believe. The facts do not exert a significant influence. It’s getting hot in Phoenix – the temperatures are in the 110's! But the temperature is not the only HOT thing – so is the real estate market! Please keep us in mind with all your Real Estate needs (don’t forget to refer your friends to us). We are always looking for new buyers and sellers, so if you know of anyone planning to buy or sell a home, please point them our way! And watch for our detailed statistics for the local real estate market mid-month! ~Bonnie & Chuck Kennedy
In this edition:
Economic forecast: Recovery with bright spots, turmoil The “Great Recession” cost Arizona 300,000 jobs and cast a shadow long after it was declared over, but the outlook for the East Valley in 2011 is looking gradually... brighter. Click here for complete article.
Foreclosures fall for 8th straight month
Five Real Estate Trends to Watch For: Real Estate Veteran Points out Key Growth Opportunities
Fannie Mae Expands Incentives for HomePath Properties
Phoenix-area housing market shows signs of price stability
Experts Agree Prices Have Bottomed Out
U.S. averages as of July 1, 2011: 30 yr. fixed: 4.50% 15 yr. fixed: 3.67% 30 yr. jumbo: 5.02%
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NEW YORK (CNNMoney) – Foreclosure filings experienced their eighth straight month of declines, according to RealtyTrac. In May, filings fell 33% from a year earlier and 2% month-over-month, according to the online marketplace of foreclosed properties. The number of homes that were repossessed (referred to as REOs or real estate-owned properties) in May also declined to 66,879, down 3.8% from April and 29% year-over-year, the firm said. 
June 30, 2011—If the housing market were human, it would look like it just wrestled a few alligators, after running an obstacle course through a snake pit. The market is beaten and bruised, but still trying to emerge from the recession, which is why Greg Rand, a 20-year 
The Phoenix-area housing market is still stuck in the mud, but at least it's no longer sinking in quicksand. That was the reaction of two local housing analysts to the latest S&P/Case-Shiller report on home prices in the nation's 20 largest metro areas. 
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