This time last year the summer sky was overcast and the rain was on it’s way. This last week, we got over 117 degrees and there’s a 10% chance of rain, but I don’t know that I believe it will actually happen. A year ago this week, short sales were all the rage and the Mortgage Forgiveness Debt Relief Act allowed you to avoid paying taxes on mortgage debt forgiven–but that ran out at the end of 2012.

Speaking about the end of the year, we’re in the second quarter now and that Q4 time from October through December will be here before you can say “Jimmy Crack Corn”. As the old-time realtors say, “Them be the slow months. Might as well kick up your heels and sit for a bit”.

But as I find myself thinking about the end of the year, I can tell you in my experience that last Halloween through New Year’s was all work for me in the real estate business. People were buying and selling through me last Q4 like there was no change of the season.

What “they” say is supposed to happen is that people stop buying or selling houses because the holidays just creep up on them and they get distracted. They say the market slows down after the summer and maybe you can negotiate a better deal during the holidays or Christmas. That has definitely not been the case for me in the last three years.

Look at previous years in the chart below. You’ll see this is generally true; especially around Thanksgiving. In the first chart, you’ll see the last nine years. Some of them drop off drastically, but come back around February.

In the second chart you will see 2004 and 2005 compared to 2010 and 2011. In ’10 and ’11 there was a little drop around November, but then we just picked right up again.

In other words:

ONE: Don’t assume the end of the year is going to be slow. Selling or buying? Take advantage of the active market during the summer months.

TWO: It’s been hectic the last two years. We have every reason to believe it’s going to be hectic this year, too.

THREE: If you want to buy or sell, Summer, Q3 or Q4 or beyond, give me a call at 602-456-9388 or email me at ken@getyourphx.com.

 You have to give it to them. Despite upcoming triple digit temperatures, the Phoenix Bike Community never stops peddling.” ~ Me, in 2012.

I wrote that in a post just over a year ago (“Can we measure distance in miles per doughnut?“) and the (then) upcoming Celebration of the city’s growing bike scene, as an event we know as Pedal Craft was just kicking into its second volume.

Here we are: June 2013. My, how quickly things pick up when people get excited about the possibilities of something… This past April, just five months after Phoenix Spokes People (PSP) formed–a group of urban cyclists dedicated to making Phoenix a friendlier, more welcoming place to ride a bike–they were represented at nearly all of the 19 community budget hearings for the City of Phoenix.

It’s not sexy, standing up and asking politicians for a much-needed increase in funding for bicycle infrastructure, but it gets the job done. Prior to PSP’s activation in the budget hearings, the city of Phoenix was spending a paltry $50,000 per year on bike safety and improved infrastructure.

Word spread quickly and we are fast becoming a popular group to join in the Phoenix bicycling community. We believe that bicycling should be an easily accessible form of transportation for people of all ages, incomes and abilities. We imagine a Phoenix with people dressed up or down – going to work or heading out for a night on the town – and getting there safely by riding their bike in a proper bike lane.” ~ Lisa Parks, PSP advocate

To put that $50,000 city of Phoenix bicycle budget in context: The country average for a bike infrastructure spending is $1 per person. In Atlanta, it’s $6 per person. Phoenix is a mere 3 cents per person!

 April 2013 Bike to Work Day (photo by Jonce Walker)

Or rather, that WAS our bike budget… That was before the Phoenix Spokes People took to our Phoenix streets and raised their voices with facts, figures, encouragement, and accountability on how the money should be spent. The result is that PSP made a difference!  The approved budget for the City of Phoenix now includes $1,500,000 to make our city more bike-friendly!

We’re sending the message that biking and walking and all multimodal transportation is as important as vehicular traffic in the city of Phoenix,” Mayor Greg Stanton.

Phoenix Spokes People has monthly meetings and monthly rides. If you bike Phoenix, they’d love for you to join them!

PSP members (Lisa Parks, John Romero, Mayor Stanton, Sean Sweat, and Joey Robert Parks) with Mayor Stanton at the first budget hearing of 2013 (photo by John Romero)

Providing neighborhood choices and transportation choices, and neighborhood choices that allow you to reduce transportation costs — are really essential for the success of Phoenix,” says Curt Upton from the city’s planning department, who’s part of the Reinvent PHX management team. “From an economic development perspective, the stakes are pretty high for us to make sure that we’re a livable city and we’re an attractive city going forward.” ~ The Atlantic, ‘Phoenix’s Walkability Gamble Might Actually Pay Off‘

(And what about Pedal Craft volume three? Sign up for details at the link.)

If you want to buy or sell, please give me a call at 602-456-9388 or email me at ken@getyourphx.com.

“Whipeeeeeeee!”

              or

“Whoaaaaaaaa!”

Every square in this rainbow slide (not the one on the left, though that does look like fun. I mean every square in the image below) represents a month—January, February, March—all going up.

This covers central phoenix and downtown zip codes, historic and older neighborhoods. One vertical stack of those boxes adds up to one year. See how we’ve dropped quite precipitously:  from 7,500 (in 2010) to 5,800 (March, 2013). In 2008 to 2010 a lot of those were short sales and foreclosures. You can shrink inventory, but the demand is still there and what happens? The price goes up.

Same three-month moving average

In this next slide is the average of all three months going back in time. In this way you keep from getting a bunch of blips that aren’t really accurate. See in those downtown zip codes how we’ve gone from $117 in September 2012 to now at $144 per square foot. Let’s look at year to year. March 2012: $105 to $144. That’s a big jump. Now the three month moving average is going to be more extreme than 12-months, because we’re averaging prices today and 12 months ago. The line is smoother and more conservative.

See from March 2012 it went from $96 to $149 per square foot. This $123 represents the average price for this day and the three months before. So you’re seeing that upward trend. Now, in downtown Scottsdale, we’re starting at higher prices.

Follow me on this:

In March 2004—in the recent comparisons slide, below—the monthly average price per square foot was $115. By the end of 2004 it was $131, a 16% increase. In March 2013, it was at $114, with very similar conditions. We started in January 2013 at $108.

Do we think the price can get to a similar 16% increase point by the end of 2013? This increase from $108 to $114/$116 is a very similar line. So for 2013, yes, I think we’re anywhere in a 16% – 20% price increase, just like 2004. I think we could very easily see average prices by the end of this year, somewhere between $125 and $130.

Now let’s take that same 15% – 20% increase—seen here in this next slide of this more-conservative 12-month moving average price per square foot—and apply it county wide to only Phoenix and Scottsdale, keeping in mind the trend-line I talked about in this post.

Phoenix was on a 12-month moving average in March of this year, sitting at $129 price per square foot (for those same zip codes). If you apply that same 15% – 20% increase, you’re looking at $140 – $146 by the end of this year. Apply that same 15% – 20% increase to the Scottsdale area, starting at $156 for the 12-month moving average, you’re looking at $170 to $175 by year’s end.

I think it’s very reasonable to say that we’re going to be there by the end of 2013.

Let’s compare visually

This here, in this next slide/image is for the whole county and is just by way of an illustration. 2004 (the blue line) and 2012 (the purple line) looked a lot the same in terms of path upward. At the end of March, we were about to surpass the same place we were in 2004.

Attention. Attention. Here ye the Town Criers.

Every few weeks, it seems, we hear a lot in the news about how they’re breaking new ground and there is all these new developments. Each one of those dots in the chart represents a month. In the month of Jan, Feb 2007 we built 4,000 houses. Over the course of over 2006, we built something like 60,000 homes. It was insane. They were crappy, throw-‘em-up houses. And now the news loves to proclaim:

Look! We’re building again!

But the number is tiny. It’s about 250 – 300 homes.

This is important to Central Phoenix for a couple reasons: These new builds are out in the fringes of Phoenix, so you’re not adding to central Phoenix inventory. Also, they’d have to build a lot more of these homes on the fringes for it to have any impact on prices in central Phoenix.

I don’t want to list ‘cause it’s going to be worth so much more a year from now.

But what happens if everyone holds off from selling? People will stop looking and prices go up.

Urban Density: Take away

• Investors –If you want to invest in something, get your mind around the fact that you’re more likely to hold it than flip it and get a better price for it; because the margin’s not there or you’re not going to get cash flow because you paid so much for that thing to begin with and nobody’s going to pay that much rent.

• Sellers –Watch for possible price plateau during the summer. With these price increases, don’t just think I’m gonna hold a year to sell and get this higher price, that’s not necessarily so. Also, with these price increases, people who are thinking this, don’t be so certain, because either people stop buying, or people are prices out of the market, or a lot more people say, “Look the prices are there, go, go, go!” I don’t think you can be that confident for a year or even 9 months from now.

• Urban Cores – are in need of urban infill. Detached residential and condos are coming in the burbs, but we need more rooftops centrally.

• Prices – They’re not necessarily a result of heavy demand, because there’s no inventory coming up the way we thought it would.

Be ye Investor, Seller, Buyer, or Town Crier, give me a call at 602-456-9388 or email me at ken@getyourphx.com. I’ll get it done.

[slide image: Trish_Gee88]

For the last month or so, I walked you through a 5-part series on the current state of the market. Today, we’re going to take a giant leap up. Welcome to…

The Macro-Macro View

This slide is from the Brooking’s Institute. It’s a very new thing. Very new information.  It’s about migration of people into Phoenix.

In about 2006 we had 400,000/year moving here, but then it dropped. People have been coming from the big red circles to the blue circles because they’re tired of the cold, the overpopulated areas, the promise of something better, lots of reasons. The circles are sized based on the number of people migrating.

The Macro-Micro View

This next graph gives us a good look at the migration percentage rates between 2001 and 2012. The gray line at 0.0 indicates a normal inflow of people migrating in and out of each city. The red lines are people migrating out. Because red lines are a negative number it’s below the 0.0 line. The blue lines are people migrating to each city. These are positive numbers.

In 2011 and 2012 you see people are moving into Phoenix. We’re going back to our normal above average inflow of people. Follow the line back to 2003, you’ll see we had a positive migration rate which peaked in 2004/05. The numbers took a huge nose dive in 2004/2005 because of bad economy and people were leaving Arizona. Now they’re starting to come back. We never went negative, though Orlando did (the dark blue, almost black line).

The macro-macro and macro-micro takeaway is that people are still leaving the east and coming into Phoenix.

Thinking Ahead: Infrastructure

Let’s think about the coming infrastructure. Where is the light rail going? Will the light rail still drive investments? There’s very limited infill planed, so if you’re an investor, you need to follow the transit.

The thick blue lines below are planned extensions of the light rail. The little circles are current light rail stops.

We’ve learned that you can hardly find a house between the 7’s now because of where the light rail is. Those people who really didn’t like the idea of the light rail coming in may still be out there, but look how much it’s helped the economy. Look at what the economic development has done.

The light rail line heading farther west on the I-10, starting at the I-17 should be done by 2023. Does this mean you need to jump on a house right now? No. Will the homes near that coming light rail line be as extremely unavailable as the last time that reduced the homes between the 7’s so significantly? I doubt it.

Look at this where the future light rail line going up 19^th Ave to Dunlap (the line past the red bit), headed to Metrocenter.

You’ll want to keep watch on Metrocenter over the next 10 years. We don’t know exactly which way it’s going to go up the 51, but we do know it will go to the ballpark. We also know that it’s going to follow the 51, though how close right up next to it is uncertain. It’s a great drive. I’d love to see the line go right up the middle of the 51 freeway. We’ll see.

The line might go into into paradise valley mall, right at Cactus rd. There are some really nice houses there. I think we’re going to see some good value go into those houses because of that.

Look back up at the big light rail map, above. Notice that the light rail does not go into Scottsdale.

 

You won’t know about it for 30 years, but Scottsdale is making the same mistake right now that Georgetown made in Washington DC in the early 1970’s.

When the Metro line opened there, Georgetown wanted nothing to do with it. They didn’t want “those people” (whatever that means) around. For that reason, all the development around the Metroline went east. There’s a new convention center, new stadium, tons of other new developments on the opposite of Washington DC, today, the exact opposite direction of Georgetown. Georgetown is dead.

Scottsdale is asking for the same thing. I’m calling it right now. You can quote me on this.

Thinking Ahead: The Phoenix We Want

Ready to make a difference in our future light rail infrastructure and other important urban choices?

Last night (5/15) the Urban Choices Community Conversation: Making Phoenix a World Class City took place with the Phoenix City Council district 4 candidates. If you missed it, tonight, (5/16) the same opportunity for downtown Phoenix will take place with the District 8 candidates at 6pm – 8pm, at Levine Machine (605 E Grant St, Phoenix, AZ 85004)

• Creating Connected Communities (Facilitating Walking, Biking, Rail, and Bus Connectivity)
• City Staff 2.1 (Silo Busting and Moving from Planning to 21st Century Implementation)
• Economic Competitiveness (Economic Resources Stewardship – Development Connected to Existing Infrastructure)
• Economic Diversity (Moving Beyond Boom and Bust)
• Transit Oriented Development (Redefining Urban Vibrancy –New Thinking in a New Economy)

Buy or sell, give me a call at 602-456-9388 or email me at ken@getyourphx.com.
I’ll make it happen.

Are they just uninformed people? Those who declare “The Bubble is coming! The Bubble is coming!”? We know we’re not in a bubble, based on the first four parts of this series, but where do the voices of doom come from?

I’ll tell you something: earlier this year, before I sat down and took a good hard look at the facts and figures, before I started laying the foundation for my market analysis briefing (upon which this series is based), before I did all, I’ve got a tell you I was worried that we were getting into minor-bubble land.

But Get Your PHX/Cromford Report team mate Tina Tamboer talked me off that ledge.

People are seeing agents listing properties at irrationally high prices. This doesn’t necessarily mean we are in a bubble. What it means is: agents are listing properties at irrationally high prices just because their clients want them to go fishing for a higher price.

Their buyers are telling them, “I want you to list it here, at this amount.”
Their agents may tell them, “Uh, that’s a little high for the comps.”
And the seller says, “No. I want to list it here.”

Agents advise, but can ultimately only do what they’re told. If a client wants to list it high, you list it high. Other people see that pricing, then they try to list it high, etc.

Remember I said in the summer things slowdown in terms of sales?

I’ve indicated in green lines, below, the first and second quarters between 2001 and 2013. Right now, we’re just hanging out close to our long-term average.

Which means what, exactly?

This year, watch for prices to go up for the first two quarters [like they always do]. People will be listing furiously. You still are not going to see the number of listings you saw during the bubble. When you get into the summer, at the beginning of that third-quarter, and all the way through the third quarter, you’re not going to see a slump, but a plateau.  ~ Tina Tamboer, Get Your Phx/Cromford Report

People go on vacation and fewer people list. Glance back to all those sections with the green lines. Note that regardless of the severity or abundance of sales, Q1 and Q2 sales always increase, followed by a plateau. So here’s the take away: if you are thinking of listing, it is better to list it and sell in the first two quarters.

Right now, we’re just at the beginning of the second quarter. You still have just shy of three full months. If you put a property on right now, chances are – unless you’re priced way above market – you’re going to get your house sold in a matter of weeks. If it’s a nice, clean property in central Phoenix and most parts of town, you’re going to sell pretty quickly.

Once you get to the summer, you might see activity slowdown, and prices fall back a little bit.

Do you really want to risk that?

When you get into the end of the year, what happens? Look back up to the chart again at Q4 over the years. You’ll see that end of the year home selling is not as good as beginning of the year. Why? Because in October, November and December, people are beginning to think about holidays, which is why sales slowdown at the end of the year. The conclusion is the same: the best time of the year to sell your home is in the first two quarters.

The first quarter of 2013 ended a week ago. You’ve got less than one quarter left.
If you’re thinking of getting your home out there, talk to me.
We’ll get it out there.

Please give me a call at 602-456-9388 or email me at ken@getyourphx.com

[megaphone man: Shrieking Tree ]

Last week, I promised to show you the real kicker. Here it is: Non distressed homes are taking on a greater role in the market. The distressed houses are going away.

What did the line look like for non-distressed homes? These are people who didn’t necessarily lose their home but their values went down. Watch what happens here, ‘cause this is the real kicker that reveals why it is we’re not in a bubble.

This chart is for Maricopa County, Median Home Sale Prices: NON-DISTRESSED SALES ONLY

The red arrow indicates the 18% pricing increase in the bubble. This was bubble-pricing at the beginning of the bubble. The large red circle that follows is what a real bubble looks like.

Now look at where we are now in this next chart. Look at the matching 16% increase at the far right of the chart, marked in blue.

We’re just matching the increase of Q4 2003-2004! Ask yourself:

What did it take to get us to where we were at the outset of the bubble? Recall those three big components from my part 2 analysis, last week. Are those at play here in the market again?

No.

We don’t have 100% financing.
We don’t have mortgage cash backs.
We don’t have schemes.

People have to have money. You have to 3.5% down, minimum for FHA. The conditions before are not the same now:

Mortgage lenders have to go to class and get licensed, just like agents now. Lenders didn’t have to do that before. You have to have some skin in the game nowadays, but you didn’t really have to have that back then. We’re not seeing those kinds of things. So for normal home prices, that dashed light blue line  in the chart above,  we’re right on the normal.

The normal home sellers and buyers are just kind of hanging out. When you look at what the prices are today

(~ $200,000 – per the number of the far right side of the above chart) and then look back into the past at the last time we were at that point, in the fourth quarter of 2004 (~ $193,950), you start to see what your equity is.

In the graph above, if you bought your home in the green box on the left, 2001 to late 2004, you had equity. If you bought it in the box on the right, late 2009 to now, you have equity. Now’s the time to sell.

Next week: Welcome to Recovery Mode (part 4)

To sell (or buy) please give me a call at (602) 456-9388 or email ken@getyourphx.com.

In Part 1 of my “Riding the Rollercoaster” post from last week, I hope I made it clear what a normal market looks like, why it’s  important to remember that the market is a function of supply and demand, and why price is a trailing factor running two months behind the market.

A person’s natural question when they learn these things is “Oh, is this another bubble?”

Now, we’re going to show you why we don’t think it’s a bubble.

We think we are  normalizing.

Don’t Burst My Bubble

Here’s evidence that we’re not in a bubble. Below is a graph of distressed sales in percentages for Maricopa County.

• The grey background is all the sales from the Multi Listing Sales Data.
• “Lender owned” is in red. See how from 2010 through 2012 it’s going down, down, down. This red line is a percentage of sales, relative to the orange and green lines. Add up each point on a different colored line and you get 100% of sales.
• “Short sale” is in orange. See how it’s been fluttering pretty steadily up and down since 2001 and then in Dec 2012, it drops, drops?
• “HUD” in blue has always been around 3% or so since 2001. Really consistent, regardless of recession activity.
• “Traditional Sale” is in green. Just a nice, even climb, upward.

So as two of these have been declining—Lender Owned, since 2010; Short Sales, since Mid-2012—and with HUD Sales always at regular levels, only Traditional Sales are going up.

On average, over the long term were getting back to the point where a certain percentage is always going to be foreclosures. Before this pre-recession bubble, nobody knew what a short sale was. Agents didn’t know what to do with them; they didn’t even know how to process them. The vast majority of agents never had to deal with them before.

Appreciation by Transaction Type

This next chart shows the monthly average sales price per square foot. At the far left of the blue line is December 2009 when we were at $123.70 per square foot. So even though we have more properties coming on the market, which we know from the previous chart and its evidence of increasing Traditional Sales,

It’s not like you’re seeing this radical push up in price, says Tina Tamboer-Glatfelter (Get Your PHX Team/Cromford Report)

What Tina means by this is that you have more things on the market that are normal. If this were a bubble you’d look at all the properties and you’d see them all go up in price. Here, you’re seeing more come on the market, but they’re still not up in price. They’re at the same price per square foot.

Maricopa County Median Home Sales Prices

The faint blue dashed line is the long-term trend line. Back in January 2001, at the far left, the median home sales price for Maricopa County was $139,500. The dashed long-term trend line continues upward to the right. If we had a forever normal market, you’ll always see this nice long slide upward. At my last market analysis gathering on March 21, Tina showed us what happened in the bubble and why.

Look at the spike up on the left of the Matterhorn shape. Why did it go up like this? You had 100% financing, people were getting cash back from their mortgages, and you have all these schemes.

And then there was that one day when somebody couldn’t sell their house for more than they thought they would. And then their neighbor, who had all this extra money taken out of their house, suddenly found that their house wasn’t worth anything, and then there was Wall Street, which didn’t help, and then it all started to tumble apart.

So now track your eyes at the tipping point of that mountain to the right, where in 2007 you had foreclosures, people couldn’t sell houses, nobody could get financing to buy up the houses that were sitting there, and you had unemployment. So that’s when we hit that lowest, lowest point in January 2009. The lift in the line between the bottom of January 2009 and that first little peak is when people were trying to get that first time home buyer’s tax credit. Then it dropped again. That’s the best effect we could do with that tax credit.

Then the lowest median sales price that we had was $123,150 in March 2011. Right now, April 2013, we’re at $180,000. You can see that on the far right of the graph. See how we’ve had a 23% increase in the median home sale prices since March 2011?

The Skinny.

If we were in pace with that long-term dashed trend line of a normally rising market, we’d be at the $200,000 mark. But because we’re at the $180,000 mark, this means that we still have some time here. The point is that we’re still $20,000 under a normal median sales price.

We’re not at a bubble yet.

But the real kicker is this:  …and I’m going to show you that very thing next week.

In the meantime, if you want to sell or buy, please give me a call  (602) 456-9388 or find me at ken@getyourphx.com

The market price is a function of supply and demand.
~ Tina Tamboer-Glatfelter, Cromford Report

“oh, oh! It’s going up! It’s going up!”

”Oh, no! Now it’s going down, it’s going down!”

It sounds simple, but people get sucked up in the passions of the moment. They forget that price is a function of supply and demand.

100 is the magic line on the Cromford Supply Index.  As you can see from the graph, below, we are below the horizontal supply line of 100. It’s gone down, down, down, so today, in 2013, we are right about where we were in 2004. 

On the Cromford Demand side, we are higher than on normal demand—people have been talking about the high demand, but look, the demand was much higher in 2009.

Tina’s point is not that the demand is super high and therefore that’s what’s making this happen.  It’s that the supply is super low. So, yes, the demand is above average, but it’s not at 150!

Like Transformers.

The Supply Index and The Demand Index transform to show us when there is a seller’s market or a buyer’s market.

In Tina’s presentation at the Get Your PHX March 26 Market Briefing, she showed how the market index was at 300 market index before the recession, which is when many people bought their homes. See how the market index comes up a little bit in 2009?

This is where it becomes a seller’s market for just a short amount of time because people needed to use that first time home buyer’s tax credit. Then that went away and it dropped. Now we’ve been climbing up, steadily.

One of the most common questions Realtors hear is ‘When is the best time to sell my property?’  Often a seller wants to sell at the peak of price, when they can get the most for their investment.  However, their answer should be to sell during a seller’s market, when there’s more demand than supply.  Price is a trailing indicator, meaning that it’s in response to leading indicators such as supply and demand.  By the time our market peaks in price, and the media reports on it months later, the seller on the fence is too late to the party.

The Cromford Market Index is a tool that combines supply and demand data for the Phoenix Metro area to give clients a bird’s eye view of whether we’re in a seller’s or buyer’s market.  From this chart we can see that the peak of the seller’s market was Spring of 2005, after that the index took a dive and seller’s only had 7 months of advantage before reaching balance.  Prices, however, continued to rise until peaking from 2006-2007 when buyer’s took solid control of the market.

Today we find ourselves in a seller’s market once again and consumers are wondering if it’s a good time to sell.  Currently the answer is yes, but if supply increases or demand decreases you don’t want to get stuck on the fence.

~ Tina Tamboer-Glatfelter, Get Your PHX Team/Cromford Report

What’s a normal market?

Most people do not know what a normal market looks like.

For the last 10 years, we’ve been in either a severe up-swing, or crash, or coming out of it. In a more normal market, though, you’re going to fluctuate back and forth on this range among either side of this 100 line of the seller’s market/buyer’s market index line. So what’s happening is you get people reacting more extremely than they would in a normal market. Have a look again at those green circles again, below.

Low and behold, here we are, today, right back where we were in 2004.

If you bought in 2004, you’re probably in a good place to sell it. If you bought in 2009, 2010, 2011, you’re probably also in a good place to sell it. This is important to emphasize.  You’re starting to see people put things on the market, which is good, because it’s a seller’s market.

When you factor in what we’re seeing in terms of distressed and non-distressed single family inventory, foreclosures, and short-sales, and then look at it all in context, you’ll understand why equity seller is returning. That’s next week.

If you want to sell (or buy), please give me a call at 602-456-9388 or email me at ken@getyourphx.com.

[rollercoaster pic: Upsilon Andromedae]

We’ve known it intuitively and anecdotally for a long time, but here is some great news that proves it: home values next to light rail are stronger.

In a recent blog by Michael Melaniphy (President and CEO, American Public Transportation Association (APTA)) he said:  “Average sales prices for residences in close proximity to high-frequency public transit were more stable during the recession”. This is not a guestimate, but backed up by strong data drawn from a nationwide report commissioned by APTA and the American Association of Realtors®.

The five cities upon which the study was based are a representative sample of the types of high-frequency public transit systems throughout the U.S. The five cities were Minneapolis-St. Paul, San Francisco, Chicago, Phoenix and Boston.

“During the last recession, residential property values performed 42 percent better on average if they were located near public transportation with high-frequency service.” ~ APTA and the American Association of Realtors®

Enter Phoenix’s $2.9 million Sustainable Communities grant (2011, from the Department of Housing and Urban Development) for Reinvent PHX —  a way to produce sustainability action plans for the five districts along the existing light rail line and establish a new transit-oriented model for urban development along the city’s light rail corridors.

As the nation continues to assign us with the unofficial title “World’s Least Sustainable City”, we’re still a “Bird on Fire” worth writing books about and paying attention to.  You may recall that in November last year, I wrote about Phoenix leading the Nation in Innovation and Efficiency.

A year ago, January, Native American Connections built a community for our growing, city-dwelling Native American populations in the mixed-use, mixed-income apartments of  the Divine Legacy, just across from the Campbell & Central light rail station.

In my post last September, I mentioned a great story on KJZZ’s Changing America series where the reporter talked about how retirees are moving into downtown areas and urban cores along the Valley Metro light-rail line.

And as The Atlantic noted in a post a couple days ago, it looks like Phoenix’s walkability gamble just might pay off.  Light rail homes gives people quicker access to alternate ways to get around town, access to jobs, and lower transportation costs in walkable areas.

All of this is particularly important if you are thinking to list your home. If you bought before about 2004 or between about 2009-2011, you are probably in a really good position to sell.

In the immortal words of one Hannibal Smith, “I love it when a plan comes together.”

If you want to buy or sell the right property near public transit, please give me a call at 602-456-9388 or email me at ken@getyourphx.com.

[metro image: King Chung Huang]

Y’all know that I dig The Cromford Report.

And not just because I respect Michael Orr, who founded The Cromford Report and who has been chief analyst and editor since its inception in 2006. The fact that Mike holds a master’s degree in Mathematics from the University of Oxford, has been investing in real estate since 1976, and is director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business at Arizona State University, should say something about his credentials.

I’ve mentioned to you in the past that the data in The Cromford Report™ comes from public records and under license from the Arizona Regional Multiple Listing Service (ARMLS) is another source of confidence. Reputable organizations like The New York Times and Get Your PHX regularly refer to The Cromford Report for daily real estate market insight in the Greater Phoenix residential market should come as no surprise. What the magic soup, secret spices, and mathematical wizardry is that makes the data into the graphs, charts, index, etc. at The Cromford Report™ is a mystery, but the results are certifiable.

I first wrote about The Cromford Report in March 2011. I’ve been citing it more frequently, lately, and I’ll be doing more so in the months to come.  If you are a real estate investor in Phoenix, you need to subscribe to The Cromford Report.

The Market Index

If there’s one thing you really need to pay attention to on The Cromford Report, it’s The Market Index. If the market gauge is over 100, it’s a seller’s market. Below 100 is a buyer’s market.

Look at the Market Index for today.

This Index is really handy. Based on this number, well over 100, are we in a seller’s or a buyer’s market?

If you follow The Cromford Index (or you’ve been reading my posts), you’ll know that number has been on the rise for the last year.

Historically, you can see what things looked like before and compare it with today.

Back in September, 2010…

Let’s back up to April 2005 and take a look at the Market Index was in context of the years leading up to 2010.

This is Central Phoenix, all areas and types of residential homes, between 2002 and 2009…

At the peak, in April 2005, the Market Index was way, way over 100, making it whose market? (I know. You don’t even have to look; some of you may not want to). Right now, today, the index is 160-ish. We’ve been seeing this coming for a long time.

Here’s the skinny.

This is a VERY HOT seller’s market.

It will not always be that way. If you’re thinking of selling, you have to get in there now. It’s been going up since late last year, but do not assume prices will go up forever. We know they don’t. We know they won’t. It’s so easy to lull yourself into a false sense, especially when you don’t track invaluable resources like The Cromford Report.

“If I just wait 6 months, the prices will be really high” they say.

Yeah, and maybe, if everyone waits six month, there will be no inventory, and the bubble will burst. Or, maybe, interest rates will go up, and then the bubble bursts.

Move on it now. Contact me when you’re ready. I’ve got your back.

I can be reached on my cell at 602-456-9388 or via email Ken@GetYourPHX.com