Phoenix Area Turn-Around?
Distressed property sales accounted for more than half of all housing sales during the month of July 2009. Distressed sales include bank owned/foreclosures or short sales, accounting for 69% of all residential sales in Maricopa County or the Phoenix metropolitan area. These distressed sales are a major impact on the Phoenix area market. July also saw a nearly 11% decrease in the number of pending sales, although this is still the 5th highest month of sales in the 36-month period from July 2006 until the present. An unusual characteristic of this market is the list price for active listings has become the base price when making an offer on a home, primarily in house priced below $200,000. The list price used to be considered a top, as offers came in less than the asking price, in today’s market that has changed.
Although the Phoenix housing market saw a decrease in pending sales, the good news is associated with the average sales price. July saw an average sales price increase of over 2%, the fourth month in a row for increases in the average sales price. Though this doesn’t mean the Phoenix real estate market has completely turned-around, it is nice to see the average sales price is the highest it has been since January 2009.
While some areas of the country are still declining in home prices and housing starts, the Phoenix area may have reached a turning point. New home construction jumped 42.5% reported for April 2009. Consumer sentiment is also up according to the National Association of Realtors, and home prices have actually increased in some parts of the country, including the Phoenix metro area.
To adjust to this changing market, a new trend in high-end custom homes has developed. A few custom homebuyers at Woodridge Custom Builders, LLC have decided to reduce the size of their initial design for a custom home. Rather than build the McMansion, some have decided to build the home of their dreams but not get carried away with conspicuous consumption. Eliminated have been formal areas of the house including formal living rooms and dining rooms. Homes are now designed around entertaining in the family areas of the home, no longer built around formal and unused rooms. Also eliminated are extra bedrooms replaced with specialty rooms that custom homebuyers actually plan to use, such as exercise rooms, the home office, prayer room, or hobby room. Reducing the size of a custom home does not impact quality or the fact that each custom homebuyer has the home of their dreams. It has been our experience that the custom homebuyer is not the same customer that will buy a spec home that has been sitting on the market. Our custom homebuyers want the home of their dreams and are not willing to settle for less.
As the market changes, Woodridge Custom Builders, LLC will stay abreast of the market conditions to offer our customers the best and most economical custom home options.