Tracking the average price per square foot of single family homes sold in the Phoenix metro area, we find that prices are back to early 2005 levels, that is, approximately $121 per square foot. The average price of a single family home has declined 25% over the past 9 months and is now below what it would have been if appreciation had stayed the same as it was in 2002-2003. And, because the inventory is still over 50% higher than "normal," we might expect prices to fall farther still. However, first-time buyers seem to have decided that prices are now low enough for them to jump in, and are no longer waiting for "the bottom." July sales (5118 units) were higher than July 07 and approximated July 2002 and July 2006 figures. With inventory decreasing, months of supply is down to 8.4, which is much closer to balanced than we have seen in about 2 years. A normal market is five to six months of supply, so we have a ways to go, but several months ago the months of supply was more than 17. The great news for buyers is the revised role of the FHA loan, which is not based on credit scores, but on debt ratios. These loans are now easier than ever to obtain, as the FHA has relaxed some of their standards for the condition of the home to be purchased. As long as the home is safe and functioning, it can qualify for FHA financing. However, a brand new law eliminates seller assisted down payment programs, so there is little time (about 30 days) if you need to take advantage of this type of program. Buyers have over 50,000 listings to choose from and near-historic low interest rates. With the increased availability of FHA financing, first-time buyers are getting into the market again, which is great news for everyone.
Location Characteristics: The metro Phoenix area is best known for its mild winters and hot summers. One of the driest major cities in the country, the dryness makes the heat tolerable in the summer. As a major metropolitan area, Phoenix offers all activities one would expect, including professional sports, theater, arts, golf, and other participant sports. For a change of climate, one can drive only 4 hours and be either at the beach or in the mountains. The Phoenix area is also virtually free of natural disasters such as hurricanes, tornadoes, mud-slides, and earthquakes. The population continues to increase, netting a new 100,000 residents annually.
About Susan Kessler:
I care about you and your needs. The information I provide is factual, not hyped. Real estate can be a great investment, but it was never meant to be a short-term proposition. Buy and hold is the way to go, so never buy something you would be sorry to be stuck with.
These reports reflect the views and opinions of their authors and are not necessarily the views and opinions of Realty Times.
