Phoenix and Scottsdale Arizona Real Estate Market Update 2011

Arizona Real Estate Agent Jen Wehner 480-748-6925The recent Arizona real estate numbers brings both good and bad news for the Arizona real estate Market. In January, foreclosure sales represented 42% of all properties sold, compared to 30% during the 4th quarter of 2010. The vital question is whether this is a temporary reaction to the bank moratoriums or a continuation of a market saturated by foreclosures. The end of last year ended in an unlikely scenario including foreclosure moratoriums, litigation challenging the foreclosure process, and much more stringent underwriting guidelines.

Foreclosure statistics, as percentage of the total resale market in January 2011, varied throughout the Phoenix metro area such as 52% in El Mirage, 42% in Surprise, 46% in Maryvale, 38% in Chandler and 29% in Scottsdale. Another component of the market was the sale of prior foreclosed homes, which accounted for approximately 40% of the traditional real estate transactions in January (4,705 sales). Due to worries about the foreclosure process, foreclosure-related activity represented 66% of the recorded transactions for the month, but 63% in 2010. Median prices from January 2010 to January 2011 declined 8% from one year to the next.

Now for some more positive news-Sales are up year over year in Phoenix by 7%, 12% in Scottsdale, 16% in Chandler, 7% in Surprise, 14% in Mesa, 26% in Gilbert-and 8% in Phoenix metro area as a whole.

Nathaniel Karp, chief economist for BBVA Compass and one of the few bank economists who track conditions here, says that Arizona’s economy is improving at a solid clip. “Arizona’s economic recovery is among the fastest in the country,” said Karp, speaking to BBVA Compass clients in Phoenix this week. “And we’re seeing a faster recovery compared to a few months ago.”

As reported in the Arizona Republic, Karp acknowledged challenges remain for both Arizona and the nation. Arizona’s state budget is in particularly bad shape, including unfunded pension liabilities, he said. But he also pointed to relatively strong manufacturing gains and exports, especially in software and and the local technology sector. Other god news include an increase in hours worked for Arizonans with jobs and only very moderate price declines for home values here.

Karp is predicting that Arizona’s economy would grow 3.4 percent this year alone, which is better than his projected 3 percent expansion for the USA On the national economy, Karp sees continuing mild inflation and moderately rising interest rates, despite sharper price increases for oil and various other commodities. He doesn’t see commercial real estate bottoming until summer, but said confidence among business leaders had increased after Congress extended income-tax laws and signaled greater clarity in regulation.

Some very exciting news for Arizona’s economy, Intel has announced its plans for a new five billion dollar megaplex in Chandler. The project will bring several thousand construction and warehouse jobs when construction begins this summer, officials said. It also will create more of the higher-wage, higher-skill positions needed in a state still reeling from job losses incurred in the recession. When the Intel facility opens in 2013, about a thousand people will be hired to run an operation that Intel executives suggest will be the most advanced high-volume semiconductor-manufacturing facility on the planet.

This Intel project follows a multibillion-dollar investment the company announced in October to revamp its existing two fabrication facilities, or fabs, in Chandler. The new facility will be called Fab 42. The project will provide several short- and long-term benefits. The Greater Phoenix Economic Council estimates that Fab 42 will create somewhere around 15k temporary jobs, including carry-over hired for jobs created by construction activity. The project also will help diversify the state’s economy and job base.

In summary, there is no doubt that uncertainty still exists in the Pheonix AZ housing market. There are also some uplifting signs and factors in both the Arizona economy and real estate market. It is important to stay updated on what is happening in today’s market, and I will continue to report on the market and important local and national news that affect us here in the Phoenix valley.

Scottsdale Arizona Realtor Jen Wehner can be reached toll free at 877-293-3259 or locally at 480-748-6925 with any questions on the AZ home market. If you would like to preview all homes for sale on the Arizona MLS you can click here ARIZONA HOMES FOR SALE