That's a rather bold headline "First Time Home Buyers & Investors... Now is the time to buy." As our clients know, we're pretty cautious and conservative guys who, for the past year or so, told a lot of people they were nuts to buy a home. Unless they got, as Randy Jackson would describe, "The Bomb", we were not advising buying.
Things have changed now and were ready to say that now is time to buy. All you first time buyers who've been on the fence, there are some Bombs out there just waiting for you. Just ask the investors who are busy building their real estate portfolios or look at the market indicators.
Several market indicators suggest the Greater Phoenix market is rebounding, primarily in the under $300,000 price range. This is not to say prices are going to go up soon... that would be wishful thinking and I'd be stupid to suggest it. However, prices in the under $300,000 market are stabilizing and that market is pretty darn hot right now.
Another huge factor is the housing affordability index. The graph shows how affordable housing has been over time. The index is generated by looking at interest rates, personal income and cost of housing. The higher the number, the more affordable it is to buy a home.
Clearly, Arizona housing is the most affordable its been since the index was created in the 1970's. As a side note, I hear the current affordability index number is over 170.
As those who have read my analysis in the past know, I am a Supply & Demand guy. Supply & Demand numbers provide a good basis for predicting behavior. Recent figures support a trend towards pricing stability.
For what seemed like an eternity, we saw inventory (number of properties on the market) in the 55,000 range. This was a huge, scary, number that made realtors have nightmares and contemplate jumping from tall buildings.
Late 2008 saw a decline in invetory and it currently sits at 42,800. Mind you, this is still a high number, yet it represents a 33% drop from just a few months ago. No more thoughts of leaping, fewer nightmares.
The demand side is equally hopeful. Property sales for 2009 are on the rise. The chart on the right shows sales figures provided by ARMLS.
The figures are significantly above their respective months in 2008 and the spike in March is very encouraging,
On the encouraging, make me smile front, sales/demand for April and May appear to be very strong. There are 13,573 homes in escrow as we speak. Naturally, not all of these will make it to the finish line, yet the data suggests April sales will easily beat March.
As I mentioned in the beginning, as well as in a prior article, most of the sales are for properties priced under $300,000. I believe the $300k -- $500K market is not yet stable and the luxury market has yet to be tested. Thus, I caution those looking at higher priced homes to still look for "The Bomb" or risk being upside down at the end of the year.
To sum things up, if your thinking about that first home, investment property or just getting back into home ownership in the under $300,000 range you may want to move forward. At the top-right portion of Urban Life there is a sweet home search tool. We invite you to take a look, dream a bit and maybe you'll find something that really excites and surprises you.
Have a great weekend. If you have any questions, we're here for you. We love to help first time home buyers and investors have the real estate experience of their life.
Gene Urban
The Urban Team at Realty Executives
602-234-5777
