A Return to Balance in the Phoenix Area Real Estate Market

A Return to Balance in the Phoenix Area Real Estate Market

If you’re a Star Wars junkie, like my son and business partner, you might get a chuckle from today’s Snapshot Heading.

If not, then what I’m referring to today is that our Phoenix Metro real estate market is reversing course, cooling its (X-Wing Starfighter) jets from a rabid seller’s market to a potential state of normalcy. And it’s happening rapidly.

The Cromford Market Index, which measures the balance of supply and demand (defined as between 90-110) in our market, in the first week of January, stood at 474 – its peak for the year. Today, less than 6 months later, it has dropped to 237 – exactly by half! And our lightspeed (faster than the speed of light weirdly enough, per Wookieepeida), descent from the heights does not seem to be abating, least not yet.

And before I get myself into more Star Wars vernacular battles with Jonathan, I’d better pull up😉

In related news, the Phoenix Business Journal released an article today (link below) about the dramatic cost-of-living increase in the nation and Phoenix Metro. The cost-of-living index in the Valley has increased over 24% in the last 3 years, far out-pacing the national average of 9.76%. And nationally, as well as locally, the article stated that the “recent surge in gas prices wasn’t accounted for in the report.”

Honestly, there needs to be a retreat or sustained leveling off in housing prices, both rentals and purchases. Yes, as property owners we love to see our home-equity/net worth increase, but on the other side of the equation, buyers and renters could use a break.

“as property owners we love to see our home-equity/net worth increase, but on the other side of the equation, buyers and renters could use a break.”

Jonathan and I were discussing this matter last night, and both of us are concerned that Phoenix and Arizona are on a business growth path that has, and probably will continue to change the affordability landscape for years to come. What we’re seeing is the immensely high rate of growth in new business (e.g., TSMC) and start-ups, plus the growth of many existing businesses (e.g., Intel) throughout the region and state.

Of course, Phoenix and Arizona are not alone. This is a national problem. The highest cost of living increase in the country is Dayton, Ohio. And smaller cities such as Bozeman, MT and Cape Coral, FL, have some of the largest cost of living spikes as well.

But the cost of housing is at the center of our economic universe, and something’s got to give. Real estate balance would be a great place to start.

May that force be with us.

The Importance of Schools – The Real Value

The Importance of Schools – The Real Value

     We are often asked by prospective home buyers the question, “How are the schools in this neighborhood, or district?” The perception of good or bad schools can play a significant role for a family with school aged children. The question of real estate value applies to everyone. One may not have kids, but make no mistake, a bad or good school label could affect real estate values.
     The short answer is that there is no short answer. This article is not meant to be an end all discussion of how to locate the right school for your kids, but to evoke some thought on the subject.
     If you’re considering a particular state to relocate to based on schools, you would find out that Arizona does not have a stellar education reputation. You would discover that it spends far less money per student than most states in our public schools. If you were to dig deeper, however, you would also discover that Arizona happens to be home to some of the best schools in the country – that’s right, the USA. In fact, U.S. News and World Report ranked 3 Arizona Basis Charter schools in the top ten national  (usnews.com Article) .  Basis wasfounded in Tucson in 1998 by Michael Block, Ph.D. and Olga Block, Ph.D. They decided to open a school that would educate students at an internationally competitive level. For more information on charter schools, check out:  http://www.azed.gov/charter-schools/
     Upon further examination you would find that there are excellent public schools interspersed throughout our communities. I recommend folks check out http://www.GreatSchools.org which supplies an amazing amount of school information including test scores, per student financial expenditures, school report cards, and parent comments. One note of caution however, when comparing test scores, understand that MANY of our under performing schools are in areas where there is a large non-English speaking child population, but for some of those schools, there was definite and measured student score improvement as they moved up in grade levels. I would have to say those schools were a success. You may want to check out this link:  http://www.greatschools.org/gk/videos/school-test-scores-video/ regarding school test scores.
     The problem that out of area prospective buyers have is where do they begin? Well again, I’d start with:  http://www.GreatSchools.org. From there, you can then do further research and even visit the schools you’re considering. Engage in school chat rooms too. Talk to teachers. It takes time to research, I know. But what better investment can you think of?