By Scott Gaertner
The question above is easily the most common question I am asked, so it makes sense to speak to it here in our first edition.
The short answer is no.
One of the contributing factors for all the bubble talk is that lately there has been some reporting that our real estate market is back to the home pricing set in the 2006 pre-bust market. That is exciting news, but unfortunately it doesn’t have the benefit of being true. There are some metrics that matched those pre-bubble levels but saying that we are back to those pricing levels is more than a little deceptive. Speaking directly to this topic, our local numbers guru Michael Orr of the Cromford Report says, “We therefore estimate that the average single-family home in Maricopa County has a 14 percent rise in price to achieve before it reaches its value in June 2006. Individual homes will obviously vary quite a bit.” And even that appraisal speaks to a much lower price point than the Scottsdale North market.
Back to the Bubble
Our last bubble was inflated by funny money loans that no longer exist and haven’t for a long time. Lending standards are just now beginning to loosen from the over-correction brought on by the bust. The number of homes delinquent on their payments and/or in foreclosure today in Maricopa County is at or near historic lows. Also, the economy is booming now, and the Maricopa county population grew more than any county in the country last year. We will keep our eyes on the market for you, and let you know if we see any danger signs. But for now, let’s end the discussion with a quote from Jim Belfiore, the president of Belfiore Real Estate Consulting, who is considered an authority on our local market: “Recent healthy growth in the Phoenix-Area housing market is based upon solid supply and demand intrinsics that are likely to continue to push up home prices. The industry’s concern is not demand today, it is supply – how to meet the needs of buyers with a thin labor pool. Any mention of a housing ‘bubble’ at this point, is nonsense.”