Coutesy of Mike Balzotti, M. Ed.

Timing the market is a difficult thing to do. We’re always looking in the rear-view mirror. If we see a downward trend, we assume it will continue. The inverse, of course, is true as well. Ask anyone who made a purchase in 2008, when prices peaked even as sales were collapsing. Prices had been trending up for years, but then fell back to prior to pre- ‘bubble’ levels.

Statistics: In the simplest terms, there are fundamentally 2 sides to the housing equation—supply and demand. In April of 2005 there were 8,342 active listings on the market in the Phoenix Metro. That’s less than a third of the typical average of 33,373. Sales that same month was a record 11,091. A feeding frenzy atmosphere continued to drive prices higher and higher to a peak in June 2007. However, the inflated prices suppressed demand. As a result, active listings increased to a peak in November 2007—just 5 months later.

20-20 hindsight: Sure, any objective student of trends could plainly see that rising prices (demand) against shrinking supply was a set-up for a fall. But most everyone was drinking the Cool-Aid that ‘housing prices always go up over time’. Even the watchdog rating agencies, whose very job is about monitoring the risk of bundle mortgage backed securities missed it. Did you see the television special ‘House of Cards’? In that television special the risk-management agencies agencies are cited accordingly?

Today the dynamics of supply and demand have inverted. Low, deflated prices, have resulted in another feeding frenzy, driven by investors with cash. At the time of this blog article, that demand, primarily for distressed properties, has resulted in a diminished supply with the logical consequence. Prices are on the rise in the areas hardest hit. In the industry we have a phrase for this—‘first in, first out’. Distressed properties, at least the foreclosed, bank-owned houses are drying up.

So, if you were waiting for the bottom of the market to jump in, did you miss it?

Well, that would depend on where you’re looking and what you’re looking for. Look at the following annual appreciation list for cities in the Phoenix Metro (courtesy of The Cromford Report):

 1.Apache Junction – up 17.5%

 2.Casa Grande – up 13.8%

 3.Arizona City – up 12.8%

 4.Queen Creek / San Tan Valley – up 12.4%

 5.Phoenix – up 11.8%

 6.El Mirage – up 12.4%

 7.Gold Canyon – up 10.3%

 8.Glendale – up 10.0%

 9.Maricopa – up 8.3%

 10.Litchfield Park – up 6.5%

 11.Goodyear – up 6.2%

 12.Fountain Hills – up 6.0%

 13.Tolleson – up 4.9%

 14.Surprise – up 4.4%

 15.Laveen – up 4.3%

 16.Gilbert – up 4.0%

 17.Buckeye – up 3.4%

 18.Paradise Valley – up 3.3%

 19.Avondale – up 2.6%

 20.Mesa – up 2.2%

 21.Peoria – up 2.0%

 22.Chandler – up 1.3%

 23.Tempe – up 0.9%

 24.Cave Creek – up 0.1%

 25.Scottsdale – down 0.3%

 26.Sun Lakes – down 3.9%

 27.Sun City – down 3.9%

 28.Anthem – down 6.6%

 29.Sun City West – down 7.8%

If you’re looking for a home in the N.E. resort corridor of Scottsdale, Paradise Valley, or Cave Creek, prices appear to be flat, or just slightly up or down. These are the communities with the historically higher average prices. This is the demographic that has been more resilient in the downturn. Still prices are rolled back in many upscale neighborhoods to what they were a decade ago.

So, no, you didn’t miss it…yet. Assuming you’re looking for mid-range luxury properties. At the street level, agents will tell you that the competition for just that is fierce. And that can only mean one thing… Call your REALTOR!

David E Smith  |  REALTOR
Russ Lyon | Sotheby’s International Realty
Arizona’s #1 Luxury Home Brokerage
602-617-7831
david@azhome.us
www.DavidESmith.us