Newspapers seem to be notorious for making the bad sound worse and the good sound better, so what is the REAL story with recent reports of the Arizona real estate recovery? The S&P Case-Shiller Index recently reported housing price gains in all but one of the metropolitan areas in the index. Phoenix has gone from bad to one of the leading cities in the index seemingly overnight.
Based upon the market “tea leaves” we follow, this news is not overblown this time; in fact, we’re surprised it took this long for the press to realize what was happening. For the past 18 months or so, residential sales activity has been quite brisk in the region and new foreclosure activity has declined substantially. The latter has kept more homes from hitting the market and the result has been a rapidly tightening supply and price appreciation. The improving market has also improved economic prospects for many households and once-pending strategic defaults are returning to performing loans or legitimate sales.
The best indicator of the declining foreclosure trend continuing is in the marked decrease in the notices of trustee sales. These portend future property seizures by banks, so these numbers are good leading indicators for the near term.
The last bank-owned lot sale in the affluent Fountain Hills community of Eagles Nest closed during the first quarter, and normal buyer traffic has returned to the marketing center. New home construction plans are once again arriving for design review and several new custom homes are under construction. Eagles Nest developer lot sales activity during the second quarter have been the best in four years.
Nothing stimulates future success better than prior success. The momentum of the recovering market is real and gaining steam with each passing month. Wouldn’t you agree?