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The Economic Minute: Phoenix and the Recovery, or Beyond Ground Zero
In this edition of The Economic Minute, economist Dennis Hoffman says that Arizona could be called "ground zero of the worst recession since World War II." The hard economic fact is that Arizona depends on in migration to keeps its economy vibrant, and the state is not exactly a people magnet right now. But, Hoffman said, this is not the first time the shine has disappeared from Arizona sunshine. The early '90s were similar, but the decade that followed was a boom. Hoffman advised that smart businesses should be preparing for the time when Phoenix regains its people magnetism. Dennis Hoffman is director of the L. William Seidman Research Institute at the W. P. Carey School of Business. The Economic Minute is presented at the monthly Economic Club of Phoenix luncheon.
Phoenix Housing Market Showing Signs of Recovery, but Still Has Issues
It's Indian Summer in the Phoenix real estate market: Like a replay of the traditional high sales months, resale activity increased in October -- from 9,070 sales in September to 9,955. But although the level of activity appears strong, it's not necessarily a sign of recovery, as foreclosures continue to be the dominant force. And, when people think about recovery they mean a time when prices return to what they paid for their homes. For people who bought at the top of the market, says W. P. Carey real estate professor Jay Butler, that time may be a long way off.
ASU-RSI: Phoenix Area Single-Family Market Improving -- Not So in Townhouse/Condo Sector
Single-family home prices in the Phoenix metro market have finally stopped diving, but the townhouse/condominium segment of the market continues to sink, according to the latest ASU Repeat Sales Index (ASU-RSI). Finance professor Karl Guntermann, who compiles the index with research associate Adam Nowak, reports that home prices declined 28 percent in July compared to July 2008, continuing a welcome moderating trend that started a few months ago. But analysis of townhouse/condominium data -- a new feature of the ASU-RSI -- shows that drop prices in that sector is still gaining speed.
Phoenix Real Estate Outlook: Residential Recovering in 2010, but Commercial Continues to Slide
Forecasts by the Greater Phoenix Blue Chip real estate consensus panel show that perceptions of the metro real estate market continued to deteriorate in the third quarter of 2009. Projections for residential development are less optimistic than for second quarter, but even so, this sector is on its way to becoming a positive force in the economy. On the other hand, the commercial sector is sliding toward a hole.
Podcast: Foreclosures and Short Sales Complicate a Volatile Real Estate Market
The troubled Phoenix real estate market has experienced high levels of activity this summer. With the federal tax credit ending soon, first-time home buyers have been scrambling to get into a deal. Meantime, investors anticipating a rise in prices are coming back to the market. Much of the activity involves foreclosures and short sales -- transactions that can be complicated and sometimes include a surprise at the end for sellers. Jay Q. Butler, a professor of real estate at the W. P. Carey School of Business, has been tracking this market since the early 1980's. He says the future of the market depends on what happens in the Arizona economy.
ASU-RSI: Signs Point to Improvement
The ASU Repeat Sales Index (ASU-RSI) continued to decline in June, but the numbers contained positive signals that improvement is the trend in the Phoenix metro real estate market. Overall, the ASU-RSI revealed that Phoenix prices in June declined by 31 percent when compared with prices in June 2008 -- a slight improvement over May, when prices declined by 33 percent over May 2008, and April, which declined 35 percent compared to April 2008. When prices are compared month to month, there is more hopeful news. Prices tracked by the index increased by 0.8 percent in June 2009 compared to May 2009 -- the first time that has happened since March 2007.
Foreclosures Continue to Taint Phoenix Real Estate Market
Foreclosed homes accounted for 37 percent of the total activity in the Phoenix metro real estate market in July -- down from February when foreclosures represented 51 percent of the sales. But despite the drop, foreclosures continue to play a major role, signaling that the market has a ways to go before it is healthy again, says Jay Q. Butler, Associate Professor of Real Estate in the Department of Finance at the W. P. Carey School of Business.
ASU-RSI: Slower Rate of Decline Equals Improvement
Although prices in metro Phoenix dropped 33 percent in May compared to May 2008, the rate of decline once again slowed, adding another month to an improving trend in the market, according to the ASU-Repeat Sales Index (ASU-RSI). The latest data also shows that unlike the last downturn, lower-priced homes are the hardest hit sector.
The View From the Bottom: Phoenix Real Estate Market
What does the trough of a real estate slump look like? Phoenix metro area property owners will have time to take a close look at this unpleasant and hazardous landscape as the real estate market slides to the bottom over the next several months -- and settles in for a slow, volatile recovery. According to Karl Guntermann, who compiles the ASU-RSI, a slight increase in resale median prices offers some hope. Construction and commercial? Elliott Pollack, co-editor of the Greater Phoenix Blue Chip Economic Forecast says: "Not a pretty picture."
After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade
From seasoned real estate writer Steve Bergsman comes this message: Proceed with caution, be patient and realize that there are many kinds of real estate markets -- each with particular potentials and pitfalls. The Arizona native's latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," helps investors figure out what to make of today's commercial, industrial, retail, multi-family, single-family, condominium, second-home and vacation real estate.
