Now that the holiday haze has cleared (and we hope you had a very happy season) our thoughts turn to the brand new year. Since 2007, it has seemed that the new year rarely promised any news better than the year before. Real estate became the slow march through a mine field where the best thing to report was that survival had been accomplished once again. We are happy to report we are more optimistic than in years past that whatever the year brings, one way or another the valley is faring better than most of the country in our recovery. That is very good news indeed.
As we previously reported, supply and demand are the name of the game and sometime in mid-summer of 2012 supply began to slowly build after a very busy buying frenzy in the first part of the year. Now as we begin 2013, supply has increased dramatically in some areas while simply building up in others. How quickly a market can turn. Some of the outlying communities (the drive until you qualify communities of 2005) have seen a very sharp rise in homes for sale accompanied by a very sharp drop in demand. For example, in the town of Maricopa – supply is about 4 times higher than mid-2012 and demand has dropped in half. In short – Maricopa is currently a strong buyer’s market. Other interior areas are seeing rises in inventory as well, although less dramatic ones, which means a balanced market has occurred or soon will through most areas. Builders are contributing to new supply after years of little to no building which is aiding in this shift as well. Demand is dropping largely due to investors losing their appetite. So while 2012 was a seller’s market, we expect to see 2013 be a balanced market tipping into a buyer’s market.
One interesting change to the market is that many sales are not occurring through MLS. Builder sales, trustee sales, pocket listings (non-MLS sales) and private sales are composing anywhere from 20-30% of the sales NOT reported in the MLS.
Short sales – a significant component of the market for the last few years, have dropped dramatically – in fact they are down at a level not seen since February 2011. REO’s are staying in low levels and we hope to see them down to such tiny levels by the end of 2013 that we feel no need to discuss them again. The repeated warnings of huge looming levels of “shadow inventory” has been proven to be a case of crying wolf.
The local real estate future still hinges, as all areas do, on the overall economy, consumer confidence and the national fiscal challenges. What impact that will have is anyone’s guess. No matter, we still feel reasonably optimistic that the first half of 2013 should be a healthy one. And for that, we are grateful.
As always, we will do our best to keep you informed on the market shifts and trends. Believe me, we find it just as mesmerizing as most of our readers do.