Economic series, Part 11: Real Estate |
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Home inventory in Fountain Hills is easing, a strong sign that the local market is stabilizing, say real estate professionals. Real estate, rental or leasing companies account for 76 businesses in town, according to business licenses issued by the town. The positive news comes after overbuilding, lack of available credit, an unstable economy and rising unemployment battered the residential real estate market for the last couple of years. First-time homebuyers eligible for low interest rates, newly affordable housing prices, an $8,000 tax credit and a loosening in Federal Housing Authority lending are viewed as contributing factors in reviving real estate sales, according to the National Association of Realtors. “Whether motivated by these incentives or personal needs, people are beginning to recognize the silver lining in this dark cloud,” wrote Realtor Erica West in her online blog. West is affiliated with Sonoran Properties GMAC Real Estate. Fountain Hills homes are selling at pre-2004 prices, said West. “Today’s buyers are motivated by the price of the houses and the affordability of their monthly payments,” said West. Since July 1, 10 single-family homes have sold. “If people come with the idea of stealing things, they may have missed their window,” said Fred Pulve, associate broker at Coldwell Banker Residential Brokerage’s local office. In the first six months of 2009, 222 single-family homes sold. West noted that sadly 73 were lender-owned, representing less than one-third of the market, and 29 were short sales, a situation where the sellers were losing their homes, security and money. A year ago, 930 single-family homes and condominiums were listed for sale in Fountain Hills. The number has hovered around 600 for most of the first half of 2009. By the end of the second quarter on June 30, the inventory had dropped to 584, according to Dori Wittrig, broker at Sonoran Lifestyle Real Estate. The mainstream news media have been criticized for reporting decreased market values and not telling buyers that many affordable homes are available at below their true value and lenders for foreclosed properties are willing to work with them. “The media have now given the buyer permission to buy,” said Earlene Nelson, manager of the Fountain Hills office, Coldwell Banker Residential Brokerage. She and several colleagues shared their views about the current situation during a weekly staff meeting. They spend more time to complete a sale because they’re dealing with short sales, foreclosures and banks reluctant to loan money. They talked about educating clients yet remain optimistic that an uptick in activity will result in improved sales above last year’s levels. Prices have risen from February and March levels and they’re seeing multiple offers on some properties. “Buyers are working their way up the ladder and feeling more comfortable and confident,” noted Glen Groetsch, a Coldwell Banker Realtor. Karen DeGeorge, also with Coldwell Banker, reported 18 sales pending. Pulve said he walked into a housing recession in 1979 when he came to Fountain Hills. “I didn’t know it at that time so I kept selling houses,” recalled Pulve. He survived the savings and loan crisis in the late 1980s. “No matter how bad things are, this also will pass,” commented Pulve about the cyclical nature of real estate. The impact of foreclosures on the market has been the primary concern for the last year, said Wittrig, but the number is waning. The perception that only high-end residences exist in town is incorrect. Homes are for sale for as low as $63,500. Fourteen single-family homes and 93 condominiums priced at $200,000 or less were listed on the market July 1, reported Wittrig. The most sales activity has been between $400,000 and $1 million. First-time homebuyers thinking about qualifying for the federal government’s $8,000 tax credit must close their transactions by Dec. 1. Realtors advise buyers to have a purchase contract signed by early October in order to have 45 to 60 days to arrange for financing and safely close the deal. In Rio Verde, where the potential pool of homebuyers is reduced because of the 55-age restriction, sales are running almost even with last year’s pace, said RE/MAX Sun Properties’ Realtor Michael Moore. “Up to $350,000, the market is very strong,” Moore wrote in his monthly report. “As you move above $350,000, the sales start deteriorating. The higher you go, the worse it gets.” Rio Verde The number of Rio Verde single-family homes sold from January 2009 to the end of June was 11, compared to 12 in 2008. Five town homes sold so this year, compared to four last year. The Rio Verde active inventory on July 1 consisted of 102 properties: 69 were single-family homes with list prices ranging from $257,500 to $1,350,000. Twenty-one town homes were listed for sale from $199,900 to $449,000, according to Realtor Donna Watson, associate broker at Sonorant Properties GMAC Real Estate in the North Scottsdale office. Five properties are scheduled to go to trustee sale within the next three months, she said. Review:
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