We attended a talk given by John Foltz, the designated broker and President of Realty Executives Phoenix. Mr. Foltz is a well know commodity in the national real estate field and has been called on by the Federal Reserve Board to give his opinion of the market.
In our opinion, the most significant aspect of the talk concerned analytical economics verses the social marketplace when evaluating conditions and future trends.
This graph show a simple sign wave and represents the typical ups and downs of the real estate market. The peak on the left occurred in the Greater Phoenix market in July 2005. The trough to the right is where we are heading. The big question is when will the Arizona market hit bottom and start on the next upward swing?
Foltz suggests the use of mathematical models will likely give false results. The better model may be socially based. Not a gut feeling, rather the conclusions reached by those whose lives are based in the industry... Realtors, Escrow & Title Officers, Home Inspectors, Appraisers, Lenders and such. These people are the first to notice change.
With that in mind, what are the social experts saying. Without exception, lenders, escrow officers, home inspectors and appraisers are saying they are getting busier. When presented with a graph similar to the one pictured, these industry representatives feel we are near the bottom of the curve. The same outcome was reached by a broad base of Realtors who were asked.
We believe Mr. Foltz. We are often shocked by the "Talking Heads" in the media and government. Their analysis and forecasts usually lag behind what we are experiencing. When you think about it this should not be a surprise. They are relying on information, data and opinion often provided by real estate professionals and this information takes TIME to receive, evaluate and disseminate. Its no wonder they are behind the loop.
Based on what we know and hear, the Phoenix market may well be near the bottom of the cycle and the time to buy is coming up fast.
Gene Urban
Ron Urban
The Urban Team at Realty Executives
