A rise in home-buying activity has boosted confidence that real estate agents have in the Valley's housing market, according to a new industry report.
Agents' optimism has grown for five months in a row as a result of seeing more buyers and a shrinking number of available homes, said Bob Bemis, CEO of the Arizona Regional Multiple Listing Service.
The listing gauges confidence every month by surveying agents who have represented a buyer or seller in the past year. The index climbed to 87 points in January, up from a dreary 57 in February 2011. The scale tops out at 100 points.
Bemis said the market is far from perfect but the strength of the five-month trend indicates a big turnaround. The news is great for sellers who've had trouble unloading their homes - but there's a downside for buyers.
"They'll be surprised if they go looking for anything other than a foreclosure," Bemis said. "If they're looking for traditional houses, there will be bidding wars. Not two or three, but eight or 10 contracts on the property because we have so few houses in that price range or quality range."
The confidence index is at a record high, though it only began last year. About 10,000 professionals are sent the monthly survey, and 6 percent to 8 percent respond. The survey asks about confidence in real estate, business climate and employment in the Valley, compared with six months ago and six months into the future.
Bemis said the index has captured local real estate sentiment as it has fluctuated with positive or troubling national developments.
"These are the guys on the streets," he said. "They're out there doing the work, interacting with buyers and sellers every day. They are a reflection of what the buyers and sellers are selling."
Agent Christine Loschiavo took the survey and said she's started to see bidding wars break out on houses less than $250,000, and even more so on those less than $200,000. That's due to inventory shrinking from 46,000 in January 2011 to just 22,000 this January.
"It really changed, I'd say, mid-December. And by January, the market had just totally turned around," Loschiavo said.
For the first time since the home-buying frenzy that peaked in 2005, Loschiavo has been advising clients to bid above the asking price. It's becoming harder for traditional buyers to compete with investors and also Canadians looking for second homes, she said.
The market has remained stable in Tempe, which wasn't hit as hard in the real estate crash. But she said east Mesa, Gilbert and Chandler are hot markets for sellers. Chandler has been helped by the $5 billion expansion of the Intel Corp. semiconductor plant and the secondary jobs that will be created, Loschiavo said.
"Chandler is the worst place to try to buy a house right now for a good price," she said. "I have to tell my buyers to overbid."
She said buyers will have a harder time through the spring, which is the Valley's peak time for housing sales. But she expects summer will remain tight because few new homes are being built to satisfy the surge in demand.
Bemis said indicators remain good for the future. But he cautions rising gas prices could hurt optimism, along with the potential for military conflict with Iran.
"I think there's a lot of unknowns out there," he said, "the biggest being the election year."
• Contact writer: (480) 898-6548 or ggroff@evtrib.com
Contact writer: (480) 898-6548 or ggroff@evtrib.com
gloriaczech posted at 4:28 am on Wed, Feb 22, 2012.
To find a great refinance rate, you should talk to at least one national mortgage lender, one local lender, a credit union and 123 Refinance. Also ask your friends which bankers and brokers they have used.
soricobob posted at 4:49 am on Wed, Feb 22, 2012.
I agree with the optimists. I find that, although the market has changed, I think it's on its way back. Rentals are more in demand (thus higher), and sales are picking up, but those who baled on their houses are having to rent, and those who qualified earlier may no longer qualify, so, it's changing, but coming back.