It's a Homebuyers Market
by Nieman, John
[reprinted from the bulletin of the Rotary Club of Tempe South]
Jay Butler, ASU Professor of Realty Studies, says the worst is still to come.
It's not yet as bad as the 1964 housing decline in percentage terms, but the declines in real estate prices are not over. Currently, 50% of recorded home sales are bank owned. Typically, only 3% of recorded sales are bank owned.
It takes 3 to 4 months following a foreclosure before the bank releases the home to the resale market. With the slowing economy and the resultant loss of jobs in the valley, more people will lose their homes. After these homes are prepped for resale by the banks, they will enter the market and drive prices even lower.
The effects of the slow-down can be seen most prominently in the outlying residential areas. Pinal County is hard hit. Land prices typically represent 20% of the value of a home. Lot prices in Maricopa have fallen to $8,000. Homes which sold for $500,000 now have an indicated value of $40,000.
Jay predicts that real estate prices will continue to decline until 2010. In 2010, there will be signs of a recovery but it will remain uneven through 2011. According to Jay's interpretation, it will be smart to hold on to your cash for another year.
Commentary on Arizona Real Estate Market
It's a Homebuyers Market
by Nieman, John [reprinted from the bulletin of the Rotary Club of Tempe South]
Jay Butler, ASU Professor of Realty Studies, says the worst is still to come.
It's not yet as bad as the 1964 housing decline in percentage terms, but the declines in real estate prices are not over. Currently, 50% of recorded home sales are bank owned. Typically, only 3% of recorded sales are bank owned.
It takes 3 to 4 months following a foreclosure before the bank releases the home to the resale market. With the slowing economy and the resultant loss of jobs in the valley, more people will lose their homes. After these homes are prepped for resale by the banks, they will enter the market and drive prices even lower.The effects of the slow-down can be seen most prominently in the outlying residential areas. Pinal County is hard hit. Land prices typically represent 20% of the value of a home. Lot prices in Maricopa have fallen to $8,000. Homes which sold for $500,000 now have an indicated value of $40,000.
Jay predicts that real estate prices will continue to decline until 2010. In 2010, there will be signs of a recovery but it will remain uneven through 2011. According to Jay's interpretation, it will be smart to hold on to your cash for another year.
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