There’s no doubt that the current market conditions are slower than most of us feel comfortable with. However, while comparing stats, it’s vital to take the stats of the last 5 years, not just from last year. Last year was out of the ordinary so it’s not accurate to only compare 2006 to 2005.

Although our inventory is higher than we’d like, at least the increase in inventory has slowed which is a sign of correction. The positive outcome is that there are people who weren’t able to purchase a home last year that are now able to, such as first time home buyers.

Below are some quotes and clips from last weeks Arizona Republic articles to summarize current market conditions and give some perspective. After reading through, remember the most important fact: there are still more people moving into the Valley than moving out!

“Like most parts of the Valley, Phoenix’s housing market is returning to normal. . . .Phoenix has several areas where buyers, particularly first-timers, can find more-affordable homes.” Catherine Reagor, The Arizona Republic, Oct. 25, 2006

* “The Valley’s housing market is going through a definite and obvious correction,” said O’Campo de Castillo. “Homes are selling, but they have to be priced right. No one is paying last year’s inflated prices.”

The Valley’s price dips are a result of supply and demand. . . .Housing analysts say when the Valley’s supply of homes for sale drops below 35,000, the market will have rebounded or close to it.

The number of listings has stopped climbing by 2,000 to 3,000 a month and was almost flat in September. That shows that the biggest dips for the Valley’s housing market could be over.

“The Valley’s housing market is returning to normal. After last year’s inflated home price run-ups, that means many areas will see prices drop,” said Jay Butler, director of the Arizona Real Estate Center at Arizona State University’s Polytechnic. “Some areas of the Valley will feel the correction more than others.”

Tim Sullivan of the San Diego-based real estate consulting firm Sullivan Group said that housing markets in California and Las Vegas will rebound quicker than Phoenix because there’s not a lot of land for new building. But the Valley has something most areas don’t: strong job and population growth. Analysts say the market could rebound by mid-2007.

* Catherine Reagor and Ryan Konig, The Arizona Republic, “Huge supply of houses keeps prices down: THE VALLEY’S VOLATILE HOUSING MARKET”, Oct. 22, 2006

A group of alumni, highly established in their careers, got together to visit their old university
professor at his home. Conversation soon turned into complaints about stress in work and life.

Offering his guests coffee, the professor went to the kitchen and returned with a large pot of coffee and an assortment of cups that were porcelain, plastic, glass, crystal, some plain looking, some expensive, some exquisite. He then invited them to help themselves to the coffee.

When all the students had a cup of coffee in hand, the professor said:”If you noticed, all the nice looking expensive cups were taken up, leaving behind the plain and cheap ones.

While it is normal for you to want only the best for yourselves, that is the source of your problems and stress.”"Be assured that the cup itself adds no quality to the coffee.

In most cases it is just more expensive and in some cases even hides what we drink.”"What all of you really wanted was coffee, not the cup, but you consciously went for the best cups.

And then you began eyeing each other’s cups.”"Now consider this: Life is the coffee; the jobs, money and position in society are the cups. They are just tools to hold and contain Life, and the type of cup we have does not define, nor change the quality of Life we live.”

“Sometimes, by concentrating only on the cup, we fail to enjoy the coffee God has provided us.”"God brews the coffee, not the cups……….

Enjoy your coffee!”

~ The Author is Unknown ~

At least my stand on a positive growth outlook for our market is continuously reinforced by facts, facts and more facts. Last week, the 2007 SRP Economic Forecast was held at the Phoenix Convention Center and valley leaders agreed that the economic momentum was strong. Among the topics discussed, the statistics on the number of jobs created since 2002 was something that they said Arizonans should be looking at instead of focusing on a short-lived housing slow down.

Panelists included Robert N. Shelton, University of Arizona President, Stephen Happel, professor of economics at Arizona State University W.P. Carey School of Business, and Kent Ennis, an economist and the director of research at the Arizona Department of Commerce. The men said that 2007 would be a “moderate growth year.” Growth continues, but at a slower pace.

I also see companies like Capital Group, one of the world’s largest investment management firms out of Los Angeles, expanding its Phoenix operations with a new IT facility in Scottsdale. They plan on filling as many as 550 new positions in three years. The Phoenix metro area continues to see growth in other areas such as health care, life science, defense and construction sectors.

The economic indicators are still in our favor. . . .and don’t forget a major draw that is bringing people from places like Chicago, New York and Minnesota right now: the weather! I’m hearing more about how it’s too cold in the mid-west, and how we’re getting some would-be Florida relocations because we don’t have hurricanes. If Mother Nature stays good to us, I’d say that’s a huge plus for a good, strong real estate market. A large number of baby boomers are getting vacation homes and second homes. Florida is a competitor to Phoenix-Scottsdale in that area, but with all of the hurricane action in the past couple years, I’m not only seeing primary residence relocations that may have chosen Florida, I’m seeing activity for those second homes and condos as well.

Keep the faith! No fair-weather Phoenicians allowed. To read more on how Phoenix ranks third in Top Ten Job Market study, Click Here….

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I said it before and I’m saying it again! Studies keep confirming that we live in an extraordinary city that is attracting companies and entrepreneurs. According to a new study, two of the top three hottest labor markets are here in the Southwest.

1. Cape Coral- Fort Myers, FL
2. Las Vegas, NV
** 3. Phoenix, AZ
4. Sarasota-Bradenton, FL
5. Orlando, FL
6. Riverside-San Bernadino, CA
7. Lakeland, FL
8. Boise, ID
9. Washinton D.C.
10. Miami-Ft Lauderdale, FL

If raw numbers were the only indicator, Phoenix would be the nation’s new employment leader. The metro area has added 271,900 jobs since 2001, the biggest gain in raw numbers for any metropolitan area. Phoenix’s five-year growth rate of 17.1 percent ranks sixth among America’s 100 largest markets. Phoenix has enjoyed consistent strong growth since 2002.

Summary
Jobs as of mid-2006: 1, 861, 200
Unemployment rate as of mid-2006: 3.9 percent
Employment trend since mid-2001: Added 271,900 jobs
Five-year growth rate: 17.1 percent
Employment trend since mid-2005: Added 94,300 jobs
One-year growth rate: 5.3 percent

So, once again, I challenge the doubters. The employment factor is a strong economic indicator that foreshadows a healthy real estate market.

Source: The Business Journal of Phoenix - September 29, 2006 by G. Scott Thomas, The Business Journal

Twin-tower condominium project will be a pair of 36-story buildings at the northeast corner of Central and Columbus avenues. The $250 million dollar project is expected to start mid 2007 with completion of the first tower by the end of 2008.

Prices range from $300,000 to $2 Million, 600 to 2,700 square feet with styles ranging from studios and lofts to three-bedroom penthouses. The towers include 500 units and 15,000 square feet of retail space on the ground level.

The project was originally called Sky Phoenix, but later changed to Cielo, which means “sky” in Spanish because it turned out to be different from the Las Vegas project called Sky Las Vegas. Aaron Yashouafar, chief executive of Milbank Real Estate Services, and David Pourbaba, chief executive of 4D Development, say they chose Phoenix for their alternative-living venture because “it’s a prime-time to come and do urban living right,” Yashouafar said. They also said that a big attraction to Phoenix is the upcoming light rail.

Top floor residences will have walk-around balconies angled to provide maximum views, developers said. Focus groups in the Central Corridor and in Chicago influenced the project, convincing them to provide a dog run, outdoor movie screen and a roof-top garden with a bar, hot tubs and fire pits.

Stay informed at www.cielophoenix.com

Read More at www.phoenix.bizjournals.com

Source: The Business Journal of Phoenix - September 22, 2006 by Christia Gibbons, The Business Journal