The median sales price for Queen Creek was reported at $150,000 by Coldwell Banker in its market action report for the area, up 33.1 percent from $112,700 in May 2011 and 4.9 percent from $142,950 for April 2012.
Additionally, the average sale price of homes in Queen Creek was $181,912, up 24.8 percent from $145,774 in May 2011, and down 1.2 percent from $184,105 last month, according to the report.
The May 2012 average sale price was at the highest level compared to May 2011 and May 2010.
The housing trends for Queen Creek are similar to those for the entire greater Phoenix area, with house prices getting higher as house sales are seeing a decline, said Michael Orr, director of the Center for Real Estate Theory and Practice at W.P. Carey School of Business at Arizona State University.
The shortage of supply is causing a reduction of house sales, Mr. Orr said.
May property sales were down 12.7 percent from 150 in May 2011 to 131 in May 2012, according to the Coldwell Banker report. Sales are down from April 2012 as well, which had 140 sales in the Queen Creek area, 6.4 percent higher than May 2012.
According to the report, May year-to-date sales were at 614, down 14.8 percent from last year’s year-to-date sales of 721.
Because fewer homes are going through foreclosure and short sales are down in the last two years, fewer homes are available to sell, driving property sales down across the Valley, including in both Queen Creek and San Tan Valley, Mr. Orr said.
Banks are encouraging short sales as opposed to foreclosures, which is one reason foreclosures are down, he said. Additionally, many people who haven’t defaulted on their mortgage or don’t have to move because they need a bigger home among other reasons, are waiting to put their home on the market because of timing.
However, Mr. Orr said people should not worry about their homes sitting on the market for too long if they do decide to sell because there is a strong demand for homes in both Queen Creek and San Tan Valley.
When you reach the $1 million-plus homes, the market is relatively quiet, though. The under-$250,000 is where most of the activity is happening right now, especially the houses under $150,000, Mr. Orr said.
Traditionally the high-end housing markets are the slowest to recover.
“ While it is recovering modestly, the high end of the market is going to be the last segment of the market to recover,” said Patrick Harvey, a Realtor for the Phoenix Metropolitan area, with West USA Realty.
Part of this is because of investor involvement in the current housing market.
Investors aren’t looking for expensive homes, they are looking to either buy a less expensive home that needs some work to turn it around to sell for a profit, or they are people looking to buy homes for renters, Mr. Orr said.
“It’s a very attractive time to be a landlord,” he said.
Investors are playing a very prominent part in the real estate game with investor involvement up from 2007.
In 2007, investor involvement in the Phoenix area was about 8 percent. Now, it is at about 28 percent, and approximately 40 percent of home purchases are coming from cash buyers, Mr. Orr said. In May, the Phoenix area saw 37 percent cash buyers, which is still very high.
“About 40 percent of the entry market (are) investors and that is squeezing out firsttime homebuyers,” Mr. MacEwen said. It’s getting more and more difficult for first-time home buyers to find and purchase affordable homes.
Mr. MacEwen also said the investor trend has pushed home prices - in some cases by as much as $50,000, according to local real estate agents - beyond what appraised values are because of the current buying frenzy.
Mr. MacEwen remains cautious that the recovery is here to stay.
A fluctuating stock market and 8.2 percent unemployment have many people uncertain about the future, he said.
“I have been doing this for 39 years and the good news is that the process is moving in the right direction,” he said of increased total sales while inventory becomes more scarce. “ The bottom line is you have amazing interest rates and even though prices have jumped a little bit on the low end ... it is a great time for the buyers.”
San Tan Valley is experiencing slightly different trends than much of the greater Phoenix area, but they aren’t unusual, Mr. Orr said.
The San Tan Valley area was hit harder than many other areas during the original housing crash, he said. A lot of homes in San Tan Valley were purchased between 2003 and 2007 when prices were high and loans were extremely easy to get. Because of this, San Tan Valley’s housing market took a big hit with lots of people foreclosing, but now it is also bouncing back quicker than many other areas with trends similar to Buckeye.
“ This is a recovery that is predominately being fueled by the low-end of the market,” said Mr. MacEwen. Because of that low-endfueled recovery, pricier real estate markets will be the last to fully recover while less expensive markets will see more significant turnaround first.
People are willing to drive further for a bigger home, Mr. Orr said. San Tan Valley was offering homes at a significantly lower price than Queen Creek and other surrounding areas that were closer to Phoenix, making it appealing to many buyers.
It got too cheap, Mr. Orr said, but it’s coming back now and leveling out.
May property sales in San Tan Valley were down 35.1 percent from May 2011, dropping from May 2011 to May 2012. Property sales are also down 14.6 percent from April 2012, according to the San Tan Valley Market Action Report from Coldwell Banker. Year-todate sales are down 18.8 percent at 1,060, down from last year’s 1,305.
Median and average sales, however, are on the rise in San Tan Valley.
The median sale prices in May were $124,900, up 41.9 percent from $88,000 in May 2011 and up 8.6 percent from $115,000 in April 2012, according to the report.
Average sale prices were up 31 percent in May at $128,684 as opposed to $98,207 in May 2011 and up 8.2 percent from $118,928 in April 2012. This put the average sale prices at the highest level compared to May 2011 and May 2010, according to the report.
Price differences between Queen Creek and San Tan Valley can be partly attributed to their proximity from Phoenix and areas where there is a high concentration of jobs, but it also partly depends on lot size, Mr. Orr said.
San Tan Valley was built during a time when builders were trying to build a lot in a small area, resulting in smaller lot sizes, while Queen Creek homes are older and offer larger lots, he said.
Professor Mark Stapp of the Arizona State University W.P. Carey School of Business, in a June 11 press release, said he was optimistic the rapid recovery would not topple itself.
“ This is how markets wind up with overbuilding and speculation, but I’m actually hopeful that won’t happen in the Phoenix metro area this time,” he said. “After the recent bust, real estate professionals are paying more attention to differentiating projects and focusing more on users’ wants and values. Also, lenders are enforcing more discipline.” For those who make a living selling real state, this past year has been a welcomed introduction into what Mr. Harvey called a “buying frenzy.”
Mr. Harvey said he is reluctant to call the current activity on the housing market a fullblown recovery.
“It is hard for me to say if there is actually a recovery going on,” he said in a June 12 phone interview. “But there is certainly a buying frenzy going on.”
Mr. Harvey buys and sells home throughout the Phoenix metropolitan area.
“ This year it is brutal,” he said of traditional home sales. “It is just brutally difficult ... (banks and homeowners) are selling for cash and well-above the asking price.”
But Mr. Harvey said it is not just investors playing the cash game.
“ They are doing everything they can to bring extra cash,” he said of traditional buyers, overpaying for a property just to purchase one.
When asked if investors are squeezing out first-time homebuyers, Mr. Harvey replied, “Absolutely; the investors are killing them.”
“I am concerned that (the housing market) is recovering too fast and we may have a blow-up again,” he said of an artificial recovery fueled by homes purchased as investments rather than homes to be lived in. “ Yeah, I think the market is a little bit overheated.”
So what does this mean for the economy?
“(It’s) generally a favorable thing for the economy,” Mr. Orr said. Jobs are coming back slowly, but the biggest area of growth for jobs is in construction with more houses needing to be built than people available to build them.
Additionally, when people purchase homes, they also often drive up sales at places such as Home Depot, Lowe’s and furniture stores as well as spending money in landscaping and other areas that generate jobs and work, he said.
Mr. Orr said the figures he sees show more jobs.
When asked how he expected trends and numbers to change over the course of the next month, three months and year, Leah Lichter-Roedig, branch manager of the Coldwell Banker Residential Brokerage Chandler office, said, “If the economy holds and interest rates stay down we should see stabilization and hopefully modest and intelligent price increases (in Queen Creek and San Tan Valley), Another factor that will influence price in the outlying areas is gas prices. Most homeowners need to drive somewhere else to work; if gas prices increase dramatically it could hurt this market.”
Editor’s Note: Terrance Thornton contributed to this article. Nora Heston is the news editor for the Queen Creek/San Tan Valley Independent.