December 24, 2013

Multiple Bids Are Getting Rare In Arizona

Bloomberg reports on Arizona. “Rick Cartagena moved his family of five in 2010 from San Francisco, one of the most expensive markets in the country, to Phoenix, where he expected lower home prices to give him a shot at owning. He wasn’t prepared for the competition. Phoenix was one of the first cities to begin attracting Wall Street-backed investors. The house Cartagena is now renting was bought by an investor for $52,000 in August 2011, public records show, down from the last sale of $194,336 in 2006. Of the 24 homes on his block, all built in 2006, only four still belong to the original owners and one was slated for auction last month, according to Maricopa County property records. The rest were lost to foreclosure.”

“Investors, including Blackstone, Colony and Progress Residential LP, have bought half the homes on the block. Cartagena is paying $950 a month to rent the three-bedroom house. He estimates it would cost him about $200 less a month — including taxes, insurance and homeowner association dues — to buy a place for $120,000, the going price for homes in his neighborhood. When he puts in bids, though, investors go higher.”

“‘I can’t compete with all the investors,’ Cartagena said. ‘They jacked up all the prices.’”

The Arizona Republic. “Homebuyer demand in metro Phoenix has backed off during the past few months, according to an ASU real-estate analyst. Sales fell in October while the number of homes listed for sale climbed, according to the latest report from the W.P. Carey School of Business at Arizona State University. The region’s median home price inched up to $200,000 from $199,000 in September. ‘Sales will be way down in November and through the holidays, when some people even take their homes off the market until late January,’ said Mike Orr, director of W.P. Carey’s Center for Real Estate Theory and Practice. ‘We also anticipate a much slower rate of price appreciation in 2014 than the furious pace we have witnessed over the last two years.’”

“Home sales to investors as well as those to out-of-state buyers have dropped over the past six months. Investors were behind almost 40 percent of all home sales in July 2012, the peak of those types of purchases. In October, investor purchases accounted for about 23 percent of home sales. Second-home buyers from outside Arizona accounted for 16.4 percent of October’s home sales, down from 20.1 percent a year earlier.”

“Listings are up 40 percent since November 2012, though Orr said the supply of homes for sale still is 15 to 20 percent below what would be considered normal for metro Phoenix. Currently, about 26,500 homes are for sale in the Valley.”

From KnowWPC. “The Phoenix real estate market, known in recent years for its volatility, is ending the year on a quiet note. According to Mike Orr, author of the W. P. Carey School’s monthly housing report, a trend that started in July continued through October, as supply increased primarily because of a drop in demand. KnowWPC: Across the balance of the market, properties are selling, but the environment is not as frenetic as it was. Multiple bids are getting rare, and sellers are finding that it’s not uncommon for a week to go by without anyone looking at their house.”

“Orr: So it’s really back to normal — in fact it’s probably a little quieter than normal, you know, the actual quantity of sales per month is down from normal. And I don’t see things changing quickly; I think we’re going to see this continue probably until the end of January.”

Inside Tucson Business. “Tucson’s overall housing market is shifting toward buyers’ favor, according to Long Realty’s latest monthly housing report. In the price bands that saw a change in market conditions between October and November, all moved from either ’slightly seller” to balanced, balanced to ’slightly buyer,’ or even slightly buyer to buyer. This was in the broad $175,000 and $599,999 range – six of the nine price bands here saw the rise in inventory needed to move away from sellers’ favor. The budget buys below $175,000 stayed in a seller’s market, while the higher-dollar homes at $600,000 and beyond stayed firmly in a buyers’ market.”

“Tucson’s new home permits hit a two-year low in November. Bright Future Real Estate Research found that the 118 permits for single-family homes is the lowest since the pre-recovery days of December 2011. A dip is normal this time of year, as builders tend to push out inventory homes that will close by year’s end, wrote Bright Future’s Ginger Kneup. But it’s disappointing, and enough to mean the area will blow Bright Future’s annual forecast by 200 units.”

“Kneup pinned this on overall economic uncertainty, and a shortage of ready lots in high-demand areas. The lots are coming, though – about 1,500 are in the final stages of development and ready for delivery in the next six months.”

Bits Bucket for December 24, 2013

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