THESE ARE INTERESTING TIMES IN REAL ESTATE!
We are entering interesting times in the Real Estate Market. Not long ago we would have said we are isolated from the trends In Phoenix. Today, I would say the “Ripple Effect” is beginning to show up here in Wickenburg. Let’s Take a Look. First, the GOOD NEWS:
Price Range Number of Homes SOLD Number of Homes Sold
2008 2007
$0-350,000 22 23
$351,000-1MILL 4 6
Over $1MILL 3 1
Totals 29 30
Here’s the next bit of important data: The Current HOMES FOR SALE :
Price Range Number of Homes
$0-$500,000 145
$501,000-$999,999 69
Over $1MILL 25!!!!!
Total 239 !!!!
YIKES! Let’s digest this.
1.) Total inventory is WAY UP! This plays into the “BUYERS MARKET” scenario. We were as high as 252 recently!
2.)There is a huge inventory between $500k and $1MILL, and ONLY 4 BUYERS IN THE LAST QUARTER!!!
3.) There’s 25 homes OVER $1MILLION!! Wickenburg is quickly becoming the “Cave Creek” that I always believed it was.
THE “NOT SO GOOD” NEWS: Lending Criteria is becoming unrealistically difficult. Lenders are turning down loans on very good buyers that would have gotten a loan 6 months ago. CASH IS KING. And those that have it… know it. They are coming into the marketplace and throwing out offers to see who bites. Unfortunately, some are biting! It will affect all of us for the short term until things trend upward. A series of Low Sales Prices in Wickenburg will force Appraisers and Lenders to include those sales in their appraisals. This will affect Property Values and possibly cause us to become a “Declining Market”.
THE GOOD NEWS: We have a significant increase in Sales in the 1st Quarter of the year over last Quarter. We have caught up to Last years numbers. Here’s how we look for Sales Year To Date vs. Same time last year: Under $400k remains the most active Market. BUT $400,000 to $1 MILL has slowed. Likewise, over $1MILL has picked up! Foreclosures remain LOW in Wickenburg. Currently about 9 properties are in Forclosure.
LAND SALES: I stuck my neck out last newsletter and said "Land Sales will revive in the next year-ish". Well... it's a good thing the year isn't over. Cuz land sales continue to languish. This year, Year to Date: Land Sales are 4 PIECES!!!! Same time last year was 9 sales! Land Loans are increasingly more difficult to get.
I hope this doesn't all sound like "doom and gloom". We are in a correction. And this COULD mean the beginning of the "bottom"! I will be looking for trends upward... and I will keep you posted!
ONE LAST THING TO CONSIDER! This is not meant as a POLITICAL COMMENTARY. This is a REAL ESTATE COMMENTARY. This Presidential election could have a significant impact on REAL ESTATE!! The two leading Democratic Candidates have both mentioned wanting to Increase the Capital Gains Tax if elected... It is currently at 15% and they are talking about raising it back up to 28%, where it was in the past. I reckon they're all smarter than me, but the way I see it, that will have a very negative affect on Real Estate. History has shown that many people will choose to NOT SELL, when faced with giving up that much to the Government. That does not seem like an effectie way to stimulate a sluggish Real Estate economy. Thanks for letting me ramble! Fell free to call with any questions or comments! Talk Soon!