Thinking about buying or selling a home in Tempe or Chandler this year? Despite what some of the nation’s real estate pundits have to say, this may be the best time in a long time. While many other cities around the country haven’t seen a significant pace of recovery, the east Valley—particularly the 85284 and 85226 zip codes—has reached a positive “balance point,” say market analysts. Balance point, in this case, refers to the approximately 5-month supply of listings which, while not excessive, is closer to pre-2007 levels. That’s when distressed sales—bank-owned properties or those in foreclosure—exceeded 60 percent of the market. That number is now 5 percent. Adding to the favorability factor is the arrival of spring, says longtime Tempe-Chandler Realtor Jeff Lucas. “Our spring market has always been the best time of the year to buy a house,” he says. “There’s normally a disproportionate number of sales from the end of Super Bowl until about the middle of June,” a time span when selection tends to be better for buyers and prices lean more favorably toward sellers.” Although seasonal timing is now at its peak, Lucas notes however that the demand side is not currently as strong as it historically has been, with the number of sales and listings per month remaining a bit below average. But not to fear: anticipated market conditions for the rest of the year indicate that the sky, real estate-wise, is not falling. For owners who want to list their properties, current factors suggest that this is an even more important reason to first get their houses in the best possible shape. “Many properties that are going to be offered for sale in this area are 30 years old or older, so if they haven’t been updated, remodeled or refreshed in some way, the pricing for those is going to fall at the lower end,” Lucas said. This can be attributed to a buyer’s recognition that a significant amount of money will have to be invested back into the property to restore or modernize it to current styles and standards. Therefore, says Lucas, sellers are well advised to perform at least the basic upgrades. “Faced with the need for improvements, the biggest return on investment is fresh paint inside, as well as outside, if needed. Custom colors also can help, as can newer carpet.” The payoff usually is significant, Lucas says, with the home often selling faster and for a better price. “Who wants to buy a property knowing that a houseful of carpet has to be replaced, where the home doesn’t show well,” he posits. “The owner going into a sale mode should make sure that the house is refreshed and cleaned. Because the spring season has arrived, it’s also a great time for the landscaping to be rejuvenated, and for flowers to be blooming.” As to what the local market has experienced in the past year, Lucas says appreciation has been on the lower end, at 1.5 percent to 3 percent, which is below the previous year’s 4 percent to 6 percent. “The reason for this is that the demand side has been weaker in the last 12 months than previously, largely because investors have left the market,” according to Lucas. This translates to a 15 percent to 20 percent drop on the demand side, a condition in which buying pressure has been moderate and appreciation lower. Another factor cited by Lucas is the result of so-called “boomerang buyers,” those who have lost their previously owned properties through short sales or foreclosures, making them ineligible for financing for three to seven years, depending on which one of those modes caused the owner’s departure. Lucas quotes estimates indicating the number of such cases in metro Phoenix ranges from 350,000-400,000. So while he is quick to acknowledge that conditions are not as good now as they once were, and while the trajectory of appreciation that has been lost has not yet been fully regained, he remains confident that the road to recovery remains wide open. “We’ve moved from instability to stability. The market should improve on the demand side in the next 12-18 months,” said Lucas. He cites renewed economic growth in Tempe and Chandler, the arrival of such giants as GoDaddy, the dynamics of a growing Price Corridor and the expansion of the technology sector as major contributors to what he expects to be a significantly brighter future. “When you listen to the national reports (on housing conditions), they mean nothing. We got hit a lot harder in the downturn; we were the Katrina of the recession,” said Lucas. “Other areas lost 10 percent of their real estate economy, we lost 50 percent.” And that, he concludes, is one more reason that today’s real estate numbers equate to some of the best buying opportunities in recent years.
Editor’s note: Carol Royse, one of the area’s longest-term Realtors who has seen the area in transition in recent years, added her voice to a discussion of the market’s current state. As did others, Royse saw reason for optimism in the near future.
Everyone wants to know, “How’s the local real estate market?” The area went through such a boom, and then a bust, during 2007 through 2010, homeowners are rightly asking and wanting accurate answers on their property values. Many have felt somewhat trapped in their homes and would like to move, either by downsizing or buying a bigger home. However, Royse says, the news from TV shows and even some newspapers can be confusing. “Here the scoop,” she says… “The market in South Tempe and North Chandler was sluggish in the last quarter of 2014. Instead of getting the post-Labor Day bounce we usually get, it was flat. “The market stayed relatively flat through October, November and December, however January did see improvement. “While there was little appreciation in home sales, the fact there were more contracts pending is positive and should stay positive through the summer months. “Seventy ‘active’ listings and 98 ‘sol ds,’” she noted. “That’s good
