While many enjoyed the ride to the top with the extreme highs of the 2005-2007 era, the ride back down beginning with the single family market drop in September, 2006 to the bottoming out of the market in 2009 was far less fun.
As the Phoenix housing market is finally recovering and on an upswing, the toll it has taken and the resurgence are nothing short of remarkable.
Construction jobs dropped like a rocket in 2009 due to the housing market, but we are finally seeing jobs in general start to gain momentum on a positive track.
Combined with low interest rates for mortgages, we are definitely seeing traction and gains in housing.
Listings have dropped more than 74% since 2011 for homes under $200,000, and prices have increased due to the demand.
That segment of the market saw 50% cash purchases at one point in time, mainly being purchased by investors. Since that time, investor purchases have declined and investors have gone elsewhere in pursuit of better investments.
Foreclosures in Phoenix have dropped significantly and are now at a more normal level.
Short sales and notices of default have declined as well, as more short sales are being closed and for the first time are priced less than foreclosures.
Competition for foreclosures at Trustees Sales has pushed prices higher, which is why investors have left the Phoenix market.
Resale median home prices have risen from $115,000 March, 2011 to $170,000 for March, 2013. That's a 67% increase, furthering the discussion that the housing market in Phoenix has rebounded with gusto!
What should we expect for the future in Phoenix?
According to the experts, there will be a housing shortage. By 2040, Phoenix is expected to grow by 2.6 million, which averages out to 96,000 annual growth in population.
According to Michael Orr, Director of ASU's Real Estate Center for Real Estate Theory and Practice, there won't be enough homes for this growth. Orr and Mark Stapp, ASU, Master of Science in Real Estate, both spoke at a recent event in Phoenix about the Future Population & Housing for Phoenix.
New home subdivisons cannot maintain this pace, in part due to undocumented, skilled laborers that may not be returning to Arizona.
New home construction is lagging demand and some developers are starting lotteries again. New build subdivisions will select a buyer that does not have a home to sell over a buyer who does have a home to sell.
Builders are buying large tracts of land, but some are not building immediately, instead waiting for prices to rise. Some builders are beginning to build on the outlying areas of Phoenix, mimicking the 2004-2006 housing market.
If you are looking for the mysterious shadow Inventory - there really isn't any. Economists at title companies, commercial realtors and Orr state that banks are not holding inventory in anticipation of risng prices.
Expecting a load of foreclosures will hit the market isn't realistic. With our very low levels of inventory, any type of home listed for sale would be a welcome relief for the pent up demand we are experiencing.
Demographically speaking ... what might our housing future look like?
In a word, the future of the Phoenix housing market looks bright with buyers buying closer to mass transit and prices and equity returning.
Phoenix is once again on the rise!