As most people know, the housing market in Phoenix, AZ has taken a hit in recent years. Are there any short-term glimmers of hope for this market? In my opinion, I feel that 2011 will probably be a year of further stabilization for Phoenix and by 2012 we will essentially start to notice a measured progression of prices moving back up.
Certain areas of the Phoenix housing market have been hit harder than others. The most affected regional communities have been Maricopa, Avondale and Goodyear, just to name a few. Several HOAs located in the Florence area have even declared bankruptcy, not an advantageous place to own a home! Gilbert, Peoria and Scottsdale are a few communities that seem to be stabilizing quite nicely.
The Phoenix area appears headed for a double dip. After the 2007 crash, the housing market stabilized to some extent, after which it began to slowly rise in 2010. Interest rates, government-assisted home purchase programs, and investor returns were the key components of prices that rose again. However, in recent months, house prices seem to be falling again. Investors are becoming a bit more careful, and government subsidies for first-time homeowners are no longer available.
As with any market crash, the bounce is not going to go straight up. There will undoubtedly be a number of obstacles along the way and this is just one of them. Residential housing markets normally slow down in the winter anyway is one of the causes. Median home prices in the Phoenix neighborhood are currently around $120,000 and are forecast to hit $110,000 by the end of winter before gradually starting to climb. Nearly all local economists and real estate professionals located in this area agree, as I previously acknowledged, that we will see a further stabilization in 2011 plus a small uptick from 2012 onwards.
Does this suggest that foreclosures are going to go away? Absolutely not. However, the moratorium that some banks have recently instituted could make a difference in future foreclosures. It appears that the larger banks are starting to become more cooperative with loan modification. However, we will continue to see a significant number of foreclosures in the next two years. We need to see new jobs come back, which by the way we’re starting to get glimpses of this within Phoenix, plus there are still thousands of foreclosures that clearly said they’re going to continue to go into the pool of bank owned home foreclosures to the sale.
There are differing opinions from experts on how the market will recover, but one thing everyone is sure of is that the Phoenix real estate market will recover, in due time.