Arizona Housing Market News

Arizona Market has been picking up.

Information was shared today by NAR chief  Economist Lawrence Yun.

It is probably the most positive market information that we have seen yet on the state of the National Real Estate Market.

We all know that home sales are set to improved nationally throughout the country during the second half of this year and recovery will vary depending on the market area..

According to Yun, Mid America cities such as Cincinnati, Milwaukee and  Kansas City, Mo. will experience home gains around the  20 to 30% range in the next five year period .

He also added that market areas such as  like Miami, Las Vegas and Phoenix, could see home prices increase as much as 50% during that time period.

Most of the softening in the market has been due to the subprime market mess where consumers with not so great  credit,  got  home loans that were out of their budget and then could not make the payments when the interest rates adjusted.

Yun actually quoted  “In fact, if you look at where home prices fell the most, it’s the markets were subprime loans were prevalent,” Yun said.  Cities included Cape Coral, Detroit; Las Vegas; Miami; Orlando, Florida.; Phoenix and Riverside, California all had a high percentage of subprime lending and all suffered big downturns in the market.

He made a very good point in that h the media is focusing on the rate of foreclosures doubling from historic averages, but also made the point that foreclosures are being driven by the subprime market loans that were given. However it has not been mentioned that the vast majority of homeowners are making their mortgage payments on time.

 We should look statistically that now that now the subprime market has disappeared, and Federal Housing Administration and those purchased by Fannie Mae and Freddie Mac  loans have been making a comeback, the housing market will strengthen. Prices are likely to start going upward the next 6 months to a year in Arizona and in Tucson.

Yun also urged the modernization of FHA programs to establish a first time home buyer tax credit and the increase of the conforming loan limit established   by the Economic Stimulus Act of 2008 to be made permanent.

Yun said “These measures would quickly stabilize the housing markets and get fence-sitters into the market to buy homes.”

As we have all been saying  the writing is on the wall. Interest rates are at a 40 year low, there is a ready supply of homes at good prices, and the strong track record of housing as an investment.“

We have all  been hearing about a Recession, however we know that there needs to be two consecutive quarters of negative GDP growth. It is an economic slowdown but a recession is not on the cards.