Update on Sales Activity in Val Vista Lakes

19 July 2007

From a high water mark of over 90 homes ON THE MARKET in early June of this year, Val Vista Lakes activity is moderating a bit... Several homes (10+) went UNDER CONTRACT between late June and mid July. This is a good pace, if the market can keep it up. (Insert Viagra joke here...)

We now have just (just!) 74 homes ON the market now, plus a few FSBO homes. That number is more in line with prior years, if we leave 2004 and 2005 OUT of the survey. The down number is SOLDS, with just 36 recorded in the MLS so far this year, plus a few more that were not entered into the MLS when sold. Very down number.

So, what are the causes of the local market being the way it is? It's just one person's opinion, but I believe that the media, with it's constant drumbeat of "Buyers! Wait a little longer to buy - the prices will be lower!" has a HUGE impact. Set aside the fact that there may be a grain of truth to the idea of prices lower, later, this mindset can be self-fulfilling. Buyers might be staying put (wherever that is) and trying to time the bottom of the market curve. This is hard for industry insiders to do, and even harder for the casual participant to pull off. Markets can turn quickly, leaving would-be buyers with time left on a lease, or otherwise not fully able to jump in. The main question for owner-occupant buyers should be "What can I afford to buy right now?" Investor buyers, those not featured on an HGTV show, can afford a bit more leeway in trying to time the market. Unfortunately, that group is shell-shocked right now from their poor timing & bad loan choices of 2004-05. If we know just one thing about markets, it is that they operate in cycles. The times are great right now for buyers, and in time, the market will smile broadly on sellers, again. Always has, always will.

Another factor looming large on the horizon (or directly over us, as in storm cloud style), is the short-sale / repo market. Checking with title companies reveals this tidbit... A large chunk of the sales that are happening are distressed properties. Homes that have loans higher than their market value, or are empty with little effort being put forth to get them occupied, or have already been "taken back" by the banks. You can spot these as you drive the streets in your neighborhood. Look for weeds, dead grass, piles of newspapers in the driveway, and on occasion, a Trustee's Notice taped to the front door. For some buyers, these look like gems just waiting to be polished. Some are, but many are not, for various reasons. From my own experience, most are not. Still, the seminar circuit is in full swing, with many followers.

FHA has been relegated to the "kid's table" at the loan banquet for 15+ years. This is about to change. Look for Maricopa County FHA Loan Limits to increase to over 400k. They have promised to be easier to work with, as well. Let's hope so! As a reminder to those new to the loan world, FHA refers to the "rulebook" that lenders play by if they wish to re-sell their mortgages as FHA-backed loans. The same lenders will still do loans, just that soon, they'll be able to do FHA loans. Minor difference, but really no more than another product on the shelf at the local money store. I used to help loads of buyers with FHA loans, so I certainly welcome this improvement. The timing is right.

Time to head to San Diego. The "other Phoenix" in July & August. I seriously have run into quite a number of local folks over there, at the beach, at the amusement parks, in the restaurants, and of course, on the roads - tons of Arizona plates on cars there!

Til next time!