Nobody has any idea. But I predict that, while it won’t be as dramatic as our last, it may go on for a while.
Here’s the analysis:
After the presidential elections in November, regardless of the winner, prices will continue to move upward. How do I know this? And why does this sound like a weather report prediction?
It’s because the coming change in home-buying patterns is showing evidence of a refreshing rain moving our way. After a six-year long summer of dry, cloudless skies, we’re beginning to smell the change in the air. A break from the scorching heat is a ‘comin.
To say it without the weather analogy, the increase in buying will continue, in part because a lot of companies are holding off on major projects and hiring until after the elections’ fallout. However, that upswing won’t be dramatic because our national debt and energy prices will continue to be a drag on our economy.
In regards to prices, we don’t see where new inventory in our Phoenix market will come from, especially in CenPho. Tight inventory means higher prices.
Mark Zandy, one of the nation’s preeminent housing analysts was on the Diane Rems Show yesterday morning talking about prices and how they are continuing to move upward as distressed properties are going away.
In Phoenix house prices have gone up 30% from last year. Yes 30%.
Take a look at the graph below, showing the Monthly Average Sales Price Per Square Foot. You can’t see the wind, but you can tell how and where it’s moving by watching the things it affects.
This chart shows a snapshot of four years worth of housing prices on the move. The brown line on top, the one with the greatest upward spiking is 2012.
My expert conclusion?
The heat is unbearable and so many people are walking around with sunburned proof of the long, hot summer. If you’re thinking of buying, make your move and buy now.
I want to say this very clearly: while prices will be going up for the foreseeable future, they won’t return to 2007 levels for years. So, if you are thinking to BUY, do it now before you lose another 30% of your buying power. If you think you want to hold off SELLING until you hit 2008 prices again, don’t expect to see that again until 2020.
If you want more information, please contact me at 602-456-9388.