January’s rise in pending home sales is a critical recovery indicator for Arizona’s real estate market, says Mesa analyst Michael Orr.
While that indicates prices are likely to increase, the recovery is expected to be shallow and slow, said the author of the Cromford Report, an online subscription-based resource on the metro Phoenix residential resale market.
The latest report shows pending sales hit a record 9,883 in the first week of January 2010 — a 79 percent increase over the 5,530 tally a year ago.
The Arizona real estate market peaked in June 2006, with the bottom hitting in April 2009 and maximum inventory of homes on the market in late April 2008, according to the report and Fidelity National Title.
“Like a supertanker, once the real estate market gathers momentum, it is very slow to turn around,” Orr said. “2010 won’t see a dramatic shift, but we can expect to see a shallow upward trend across the market. The number of homes under contract is more than double what it was last January, and sale price increases are likely to follow.”
While demand has cooled at the bottom of the market, activity is warming for homes in the $250,000-$400,000 range, but individual neighborhoods may vary, according to the report.
And short sales are on the rise.
“The last three months of 2009 saw a 60 percent increase in short sale closings,” says Fidelity Senior Vice President Steve de Laveaga. “In 2010, you will see a number of lenders move to aggressive short sale programs and cash for keys for sellers.”
http://www.bizjournals.com/phoenix/stories/2010/01/25/daily26.html?s=industry&i=resi_real_estate
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