There are many factors that can control the downswing or upswing of a local, regional or even national real estate market. Arizona is one market that has many attractive factors that could stimulate a more rapid upturn in real estate values.
Have We Hit The Bottom of The Real Estate Crash?
The question many homeowners and investors alike want to know the answer to is, Has the housing market bottomed out yet? The media, who delivers their never-ending picture of doom and gloom would say, “No, and we won’t hit bottom anytime soon.” Historically, housing markets that begin declining during a downturn of the market, last an average of 5 years before returning to a healthy state of growth. It is the opinion of this author, the bottom has arrived.
What Happened To The Arizona Housing Market? It Was All Ego
It is no secret that like many markets across the country, Arizona just grew too fast in a relatively short span of 5-10 years, from 1995-2004. Part of this period (the first 4-5 years) was healthy growth with reasonable levels of supply and demand of homes. But in the latter part of this cycle, the growth went through the roof!
People were buying homes or land at one price and turning around and selling a month or so later for large profits. Also during this period, offers on homes were usually in excess of listing prices, and sellers could pick between multiple offers! This just is not realistic!
It is not like Arizona is the Atlantis of the United States!! Sure, we have much to offer, but, real estate is not an ego-driven industry. When people begin having bidding wars because of their egos, disaster is inevitable.
And so the story goes, with buyers offering ridiculous prices for existing homes, new home builders decided to get aggressive!! They began buying up land and building new homes as fast as they could. Before you knew it, the supply far exceeded the demand, and we had a gross over-inventory of homes for sale. Now, we were faced with a situation of not only “ego buying” but also, “ego building!” The writing was on the wall, and a downturn was inevitable.
Things Are Improving In Arizona
As I see it, the market has indeed hit bottom and we shall soon see an improvement in sales. Arizona remains as one of the more attractive places to relocate to. We have good climate conditions, great employment rates, good infrastructures and rapidly improving transportation systems. These factors, coupled with historical data trends indicate the potential for improvement very soon.
If we could convince the media to print a more positive and realistic spin on conditions, buyers would not be so wary and things would get better faster. Even for the more pessimistic who may follow more of a statistical analysis approach, data indicates a worst case would be bottom arriving third quarter of 2008. For a take on the media spin on the industry see a previous article: Need To Sell Your Home - Look Online For A Listing Agent.
It Is Time To Buy A Home
We've already begun to see investors creeping back into town and scooping up deals for ridiculous prices. This won't last, and the time to buy is now. There will always be, no matter what the market climate, opportunities to pick up foreclosures or other great, less conventional deals. But, for the average consumer, now is a good time to buy. First time homebuyers, this is your chance! We’re actually seeing price increases in the past several weeks in certain pockets of Scottsdale, AZ. This is a sure indication that things are returning to a healthier state of stable values for housing. Someone let the newspapers know please!!
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