Short Sales Aplenty but Also “Glimmers of Hope” in the New Year
AAR asked the association’s five regional vice presidents to report on the state of their market areas going into 2012. The regions are beginning to see distinct signs of promise, but distressed properties are expected to continue to play a large role.
Bullhead City/Mohave Valley, Kingman/Golden Valley, Lake Havasu, La Paz, Yuma
With sales reports in for November, Region 1 sales are generally on par with 2010 and in some cases have shown an increase over last year’s number of units sold. The number of REOs on the market has declined in general, but pricing is still under pressure. Mohave County is encouraged by two major employers coming into the area, and we feel that the influx of new jobs to the area will help boost property sales in the coming year.
Kingman/Golden Valley, Lake Havasu and Bullhead City will continue to collaborate in two major areas in 2012. First, we will provide our members with GRI education opportunities spread among the three associations, allowing Mohave and La Paz agents to receive training in one year without leaving the area. Second, the Mohave County Regional REALTOR® Government Affairs Council is in full swing and ready to provide information to our members on candidates and issues in the upcoming elections.
AAR Regional Vice President – Region 1
Realty Executives/Mohave (Kingman)
Phoenix, West Maricopa County Regional
Region 2 is proud of our members and our region. We have adapted and adjusted to the market changes this year. Short sales have become the norm, while REO inventory has been slowly dropping. Our foreclosure numbers are down overall, and we are seeing a large number of flips in every price range. The reduction in inventory is leading to multiple offers once again, even in the short sale category. Industry wide, the opinion seems to be that Region 2 has hit bottom and is improving slowly.
The area of property management has been very brisk, due to both the large amount of investor-owned rental properties and the rental demand by the many people who need a place to live due to either foreclosures or short sales of their existing properties.
Appraisal issues have continued, along with stricter lender guidelines, leading to increased problems for buyers in getting their transactions closed. However, interest rates are still incredibly low, encouraging buyers to enter the market.
PAR and WeMAR have both continued to support their Realtor® members with great educational opportunities and up-to-date national, state and local real estate information. We are all excited regarding the ARBI project through AAR, and we wish our 2012 AAR President Holly Mabery an exciting and productive year.
Jan Leighton, GRI
AAR Regional Vice President – Region 2
JD Campbell Realty, Inc. (Peoria)
Northern Arizona, Sedona/Verde Valley, Prescott Area, Central Arizona, White Mountain
Region 3 is the “destination areas” of Arizona enjoying beautiful views, recreation, trees and red rocks. We have fought hard to stay afloat during this real estate crisis, and it looks like this bumpy ride may be settling down and looking up.
White Mountains – Commercial real estate is stagnant. Inventory is holding steady with no fall in prices. The majority of sales still seem to be distressed properties.
Central Arizona – This area is entering a slow period, but sales are up 10% over last year.
Flagstaff – Total sales are expected to end the year at 10% over 2010. The median price is $185,750 with an average 104 days on market. 31% of sales are distressed properties. Quality inventory is low; currently, they have around 860 homes on the market compared to a normal 1,200. With this drop in inventory, Flagstaff expects to see a stabilization in the middle of 2012 and begin the road to recovery for their area.
Sedona – This area is experiencing shrinking inventory, multiple offers, selling at over list price and more demand.
Prescott – Glimmers of hope are appearing. Inventory is down significantly, prices are low and properties below median price are selling quickly and with multiple offers. Banks are working harder to complete short sales.
To recap, our region is mostly retirement, second home and recreation. Overall, sales are improving and the median price homes are in demand and selling. Higher end homes in this region are sleepers. We may be in the “new normal.” With prices stabilizing, banks cooperating and historically low interest rates, this is a great time to buy and to be in real estate.
Paula A. Smith, ABR, CRS, GRI, e-PRO
AAR Regional Vice President – Region 3
RE/MAX Mountain Properties (Prescott)
Scottsdale Area, Southeast Valley Regional, Western Pinal
What will this year of 2012 hold for us? As REALTORS®, change is probably the only certainty. The Mayan calendar ends this year, which could eliminate the need for any planning… But that’s not much fun! What we do is fun. Never a dull moment navigating the real estate maze!
Throughout our region, 2011 showed a lot of change as inventory declined, the number of foreclosures went down and successful short sales began closing in record numbers. There were actually a few traditional listings happening in our area, though prices remain lower than most original sales prices, keeping everyone stressed. Of course, people need to live somewhere, so if you are comfortable in your home and can sustain the payment, then the best advice is to sit tight. Not what a REALTOR® wants to hear!
I anticipate we will see more and more regular sellers this year. The huge numbers of homes built during the “boom” are finally old enough to allow the owners to sell and at least not lose all of their equity. The newspapers still show many foreclosures every day. They are not showing up as active inventory at the same pace as in 2010 and at the start of 2011, but the fact that they exist is an issue that we’ll need to deal with, so I expect the REO market to stay strong through 2012.
Pinal County is on the verge of some serious new growth—positive changes for the real estate community, for sure. Union Pacific railroad has added another set of tracks through all of Pinal County and is still trying to finalize approval for a switching station in the Red Rock area. A project called Phoenix Mart(named for the bird, not the city) is slated for this year, adding over 3,000 jobs. And the county seat of Florence has a new copper mine being developed, promising another 5,000 jobs. This mine project is environmentally friendly and has received some strong local support. Please take a look.
This is an election year that will certainly see change: donate to RAPAC! Work hard and make a difference.
Susan Abdallah, GRI
AAR Regional Vice President – Region 4
CG Cactus Realty LLC (Casa Grande)
Tucson, Southeast Arizona, Douglas, Graham/Greenlee, Green Valley/Sahuarita, Santa Cruz County
Region 5 is very unique because each association’s market area is different from another.
Tucson is a metropolitan area with one of the largest associations in the state and usually experiences market conditions ahead of the rest of the region. Green Valley is predominantly a retirement area. Santa Cruz is a newly developed rural area near the border. Sierra Vista is characterized by a large military population. Last but not least, Douglas is a small community near the border with one of the smallest associations in the state.
Even with our diversity, we are experiencing the same market conditions and forecast for next year. Real estate in southern Arizona is showings signs of recovery; however, real estate sales are tied to jobs, so unemployment is a key factor. Overall it appears that sales and prices are stabilizing. A higher percentage of buyers are coming in with cash or are very well qualified. Buyer confidence has increased. The majority of the homes selling are in the lower price ranges. We definitely saw an increase in short sales and REOs in 2011 and expect them to continue to play a significant role.
With interest rates at a 50-year low, plentiful inventory and sellers offering to pay closing costs, it is the perfect time to buy. We believe next year will be the comeback, turnaround year for us.
Donna R. Beedy
AAR Regional Vice President – Region 5
ConnectRealty.com (Rio Rico)
THE ROLE OF THE RVP
Arizona’s REALTOR® community is organized into five regions. These regions are represented on AAR’s executive committee by five regional vice presidents (RVPs) elected to two-year terms. The RVPs are responsible for maintaining effective communication and cooperation between their region’s local associations and the state association.
RVPs also facilitate twice-yearly regional caucuses—at Winter Conference in Prescott in the spring and at Leadership Conference in Phoenix in the fall. If you’ve never attended your regional caucus, here are three reasons you should consider it.