This morning I attended the ASU Real Estate Council event and Mike Orr was the guest panelist. He shared many new insights into the current lackluster performance of the Phoenix Housing Market and some of the recent causes for the lack of performance.
Some interesting facts:
-Jan 2011 the Avg Normal Sale/SF was $111/SF
-July 2014 that number was $128/SF -Most expensive in July 2014 was PV ($326/SF)
-Active Adult Communities are still the most active residential real estate market right now
-Supply is below normal and falling (currently 84%)
-demand is weak but stable (82%)
-Loan deliquency in 2010 was over 16%, as of 9/2014 about 4.5%
-Sellers can expect continued price weakness thru 2014 with an improvement in 2015
-Demand to buy is still weak but demand to rent is high
-Rentals have seen 11% increase in rents in 1 year with no sign of slowdown on the horizon
-Estimated value of Maricopa County Residential Real Estate Market is $400B; investment funds only purchased approx $1B of the stock--which at the peak was about 10% of the total sales
Penalty Box Buyers
-367K owners lost home to foreclosure/short sale between 2008-2013
-Fannie/Freddie lock out these owners for 7 years
-Since 2008, 19% of homeowners went thru a foreclosure (232,767)
-peak eligibility will be 2015-2018 to buy a home again
Millenial Impact on Housing Market
-Difficult to calculate and there is currently no way of gathering data accuracy greater than 60%
-Females are waiting until 29.4 years of age to have first child
-Birth Rate in USA is down to 1.7
-Many are still living at home
-Children change the perspective of the Millenials
Other interesting facts noted:
-Median Age of Realtor is 54
-We are in the "Affordable Zone" for housing
-A person from CA could buy 3 times the house in AZ vs buying in CA right now
-We are in the weakest construction period since the 1920's
How to get demand back to 'normal'
-mortgage applications are at the lowest level since December 2000
-weaker credit applications must be approved (side note---not approval like was seen in 2006 but use the actual standards that should have been used)
-Millenials will join when they have kids which is potentially 7 years later than their previous generations
-normal credit should be 650 FICO or better. Right now only loans being approved are with avg FICO over 755
A lot of information was thrown out in a short period of time. If you were there, what other facts did you takeaway from the event?
When there is rise in tide go along with it and when there is fall in tide again get along with it!!
All what you need is a little patience and focused thoughts will get you back all those customer relationship that you maintained with the clients!!
So true! Thanks for stopping by my site!