The Heat Is on in the Desert: Nevada and Arizona Real Estate Warms Up for a Comeback
After covering the trend toward hotter markets in the Pacific Northwest and California, we're taking a trip to the desert- and we're taking you with us. Pack your sunscreen! Because the weather isn't the only thing heating up in Nevada and Arizona. Property values too, after a deep thaw, and warming up for a turn around. Today we'll study this national trends toward fewer homes sold for less than asking price as it applies to Las Vegas, NV, Phoenix, AZ and Tucson, AZ.
Las Vegas, NV
A much beleaguered metro area in terms of real estate, Las Vegas has presented challenges to its home sellers, everything from a steep uptick in distressed properties to tanking home values to lackluster demand from buyers. That’s why this ZipRealty data is exciting. Las Vegas’ progress starts with a return to a more even market, in which more often than not, sellers price homes in a manner buyers find enticing. We think we’re seeing that here:
Want more sizzle? Seems like you can get it in Las Vegas, at least according to these stats: The median home price (including both single-family homes and condos) for June of 2012 was 120K; this is over 14% higher than it was the previous June. Meanwhile, inventory is down over 28% but at the same time, home sales in April of 2012 were up 6.5% over April, 2011.
In Phoenix, another city hard hit by the economy’s downturn, offers another example of progress in the desert. Over the past five years, the average home has lost over 50% of its value. But Phoenix hasn’t given up-- we’ve actually blogged about this city’s recovery, employing the unavoidable phoenix from the ash metaphor to describe the slow, but certainly upward (and heroic!) movement of this market. The data on below asking transactions confirms that Phoenix is rising.
Further proof of the Phoenix in ascent: The median sales price for all types of homes in Phoenix AZ from April to June was $112,000, up 23.7% compared to the 2012’s first quarter, and up 31.8% year-over-year.
Slightly less battered by plummeting home prices, Tucson hasn’t escaped the slowing economy. But here too we see the desert heating up, as below asking transactions have decreased year-over-year.
Interestingly, Tucson’s median home price went down over 5% this June, year-over-year; but this doesn’t necessarily signify a negative trend. According to Inman News, Tucson is making excellent progress cycling through it backlog of REO and foreclosed properties, great news for that city since abandoned homes moldering on neighborhood streets do nothing to help nearby real estate values. Logically, REOs and foreclosures are generally less expensive properties; that means if more of these are selling, the median sold price will go down—at least until the distressed properties stop skewing the data.
The desert then offers us 3 sample markets where property values are heating up. Add these samples to our previously studied California and Pacific Northwest markets and you’ll come up with a very sunny outlook for the nation’s real estate this summer.
Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in theSan Francisco Bay AreaandPacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert.