Tuesday, August 31, 2010

Canadians now top out-of-state homebuyers

by Catherine Reagor - Jun. 2, 2010 12:00 AM

The Arizona Republic .

      There's a shift in who is investing in metro Phoenix homes. Californians are no longer the region's biggest group of out-of-state buyers.
      Now, the dominant group of out-of-state buyers is from outside the country. Canadians bought 405 Phoenix-area houses in April, according to the Information Market. About one-fourth of the people who bought homes in metro Phoenix during April weren't from Arizona.
     Californians purchased 368 Phoenix homes. Buyers from Washington state were third with 146. More people from the Midwest are also investing in the Valley. Residents of Illinois, Minnesota, Wisconsin and Iowa bought a total of 332 homes.
     Information Market analyst Tom Ruff believes the new makeup signals an important change. Californians have long led the pack for buying Valley homes, and investors from that state are often speculating on the Arizona market.
     But Ruff believes Canadian and Midwestern homebuyers are less speculative and will hold onto homes they purchase in metro Phoenix for much longer than Californians.

How you will know when the Market Trend is about to change

     Here it is in a nutshell: it's all about Supply and Demand. Just like the three most important words in Real Estate are location, location, location; understanding how to apply the basic economic Pillar of Supply and Demand to Real Estate is the key to knowing when to buy and when to sell.
     As long as there are more houses for sale than buyers interested in buying them, prices will decline. On the day 8/31/2010 there were 43,773 homes for sale in the Greater Phoenix market. One year earlier the number was 37,460.
     This tells us the Trend, is a rapidly growing number of homes for sale ie., too much Supply. So we can expect prices in this market to continue to decline.
     So you ask, when will prices bottom out and begin to rise? When the number of homes for sale reaches say, 20,000, we will be approaching the bottom of the decline.
     Home values have been declining roughly 10% per year for the last four years. There is nothing on the horizon indicating a change is coming to that trend.

Bill Gosiak
16+ years in the business
Helping clients make informed decisions