2009 Metro Phoenix Economic Snapshot Sample

Produced by Desert Lifestyle Publishing • 480.460.0996

2008 Sales Statistics By Community

2008 Average Sales Price By City

Community Average Days On List/Sell # Sales Price Market Price Ratio Closed

Ancala ........................................$1,225,000 ................. 213 ................... 92 ...........................10 Bellasera ........................................$661,470 ................. 146 ................... 92 ...........................17 Boulders ......................................$1,067,794 ................. 166 ................... 93 ...........................17 DC Ranch......................................$965,484 ................. 163 ................... 94 ...........................91 Desert Highlands .......................$1,867,388 ................. 288 ................... 84 ...........................18 Desert Mountain ........................$2,227,782 ................. 224 ................... 90 ...........................59 Desert Summit ...............................$958,286 ................. 242 ................... 92 ............................7 Eagle Mountain ............................$746,444 ................. 157 ................... 92 ...........................17 Estancia ......................................$3,061,062 ................. 483 ................... 88 ............................8 FireRock ......................................$2,050,500 ................. 261 ................... 89 ...........................20 Gainey Ranch ...........................$1,119,170 ................. 139 ................... 93 ...........................17 Grayhawk .....................................$677,914 ................. 165 ................... 94 ...........................93 Ironwood Village ..........................$526,824 ................. 125 ................... 95 ...........................17 Legend Trail ...................................$701,597 ................. 212 ................... 94 ...........................44 McCormick Ranch .......................$585,791 ................. 153 ................... 94 ...........................25 McDowell Mountain Ranch ........$609,694 ................. 150 ................... 95 ..........................159 Mirabel Club ..............................$2,335,625 ................. 250 ................... 93 ............................8 Pinnacle Peak ............................$1,164,195 ................. 213 .................. 87 ..........................38 Scottsdale Mountain ...................$862,869 ................. 213 ................... 93 ...........................27 Scottsdale Ranch .........................$650,525 ................. 161 ................... 94 ...........................48 Sincuidados ...............................$1,140,000 ................. 203 ................... 96 ............................8 Silverleaf .....................................$3,079,135 ................. 288 ................... 89 ...........................22 Stonegate .....................................$648,060 ................. 153 ................... 95 ...........................31 Terravita .........................................$603,848 ................. 137 ................... 96 ...........................56 Troon North ....................................$840,540 ................. 199 ................... 91 ...........................60 Troon Village .................................$926,901 ................. 209 ................... 93 ...........................52 Whisper Rock .............................$3,050,364 ................. 332 ................... 94 ...........................12 Winfield ..........................................$551,688 ................. 171 ................... 92 ...........................12

Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.(Single-Family Residences)

Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.(Single-Family and Multi-Family Residences)

Scottsdale: $562,774

Gilbert: $268,258

Mesa: $207,806

Chandler: $278,036

Peoria: $242,251

Glendale: $195,947

Carefree: $799,752

Cave Creek: $464,659

Phoenix: $212,623

Litchfield Park: $254,267

Paradise Valley: $1,979,803

Fountain Hills: $474,747

Tempe: $260,365

The Local and National Economy Are We on Track for a Recovery?

Buying Real Estate How Do You Know When the Time is Right?

M E T R O P H O E N I X

10 Real Estate Predictions for 2009

As I write to all of you about the state of our current housing market and what we may be facing in upcoming months and perhaps years ahead, I am reminded of an often-used quote that “knowledge is power and the application of that knowledge is empowering.” As of this date, we know that our home prices valley-wide have plummeted nearly 40% in this past year which matches the spike we experienced in 2005. One can only wonder if we have hit bottom and can foresee an increase in values and sales in upcoming months. If that were the only factor to consider, the answer might be a probable “yes.” However, there are other factors we need to take into consideration as all of us make our financial plans going forward. Job growth, which has long been held as one of the key indicators impacting housing, has exceeded 3% annually for the past 15 years. When we surface from this economic crisis, the Southwest will return to strong population and job growth for the sheer fact of the availability of land. Our present job growth rate, however, is a -2%. Currently, according to RL Brown, one of the foremost housing experts in Arizona, “It is difficult to find areas of the Valley from Pinal to Peoria where any new construction occurs.” Recently some parallels were drawn between what we are seeing today in the financial and housing sectors with the “crash of the 80s” and the S & L crisis. It is important to note that one striking difference is that the center of the 80s’ crash was commercial real estate which affected far fewer people than today’s crisis centered in the housing market. As many of the major markets nationwide experience shrinking home sales, homeowners relocating to Arizona are either forced to cancel, delay or rent as they wait for their homes to sell in their previous locations. Lending guidelines have tightened and “creative” loans have disappeared. With over half of the active inventory comprised of short sales and foreclosures, and 80% of current closings from those same two categories, only serious sellers who understand the dynamics of the current market will succeed. Although today’s sales are not as profitable as in recent years, the opportunity to buy and finance a home at an unprecedented value more

than makes up for the profit loss on the sale. For those who continue to try to time “the bottom” of the market most surely will miss one of the best buying markets in recent history.

Henderson consistently ranks among the top ten individual RE/MAX agents in Arizona and is a recipient of the Business Journal Real Estate Leadership

Award for 2005. Her charitable works include Habitat for Humanity, Children’s Miracle Network and the Susan G. Komen Foundation.

THE GAYLE HENDERSON GROUPABR • CRS • GRI • e-Pro • CLHMS • CDPE

RE/MAX Excalibur8510 E. Shea Blvd. #100 • Scottsdale, AZ 85260

602.850.4335 • [email protected]

AZMovingPlan.com

Gayle HendersonPresents

2009 Metro Phoenix Economic Snapshot

If your home is currently listed, this is not a solicitation for that listing. We’re Fair Housing Providers

OUR ECONOMY IN RECESSION While the “R” word was gingerly bantered around in early 2008, there is no doubt that the US is in the middle of a full-fledged recession here in 2009. “Recessions are messy and downright scary, but they eventually come to an end with the stage set for the return of prosperity,” says Marshall Vest, an economist with the University of Arizona. Our current recession, which really began to touch Arizona in the third quarter of 2007, is expected to be the longest and deepest recession in our state’s history. “This recession should bottom out in the second half of 2009. This is not equal to the Great Depression. It may be the ‘worst since’, but the US has been through ten recessions since WWII and the bad times eventually and always fade. When things appear bleakest, recovery is not too far off,” Vest notes. Most local and national economists agree that 2009 will bring the economy a recovery, specifically in the second half. The first half of the year, though, is expected to be tough.

ECONOMIC INDICATORS Job losses and unemployment applications continue to mount. National jobless claims are running at over 550,000 per week now and predictions are that national unemployment figures may rise to nearly 9% by the end of the year. Consumer confidence and retail sales are expected to improve slightly in 2009. Metropolitan Phoenix’s retail sales are expected to grow 0%. A 0% growth may not appear to be worth noting as a positive, but that’s in comparison to 2008’s decline of 10%. (Source: Elliott D. Pollack & Company, AZ Blue Chip and Department of Commerce.) The Metropolitan Phoenix commercial real estate markets will have a rough 2009. Apartment vacancies are expected to rise, office vacancy rates may approach 18% by year end (source: Greater Phoenix Blue Chip Real Estate Consensus), and the industrial market will also see a downward pressure on rents and increased vacancy rates.

WHAT’S THE GOOD NEWS? On December 22, 2008, the US Census Bureau released good news for Arizona. Arizona was the second fastest-growing state between July 1, 2007

and July 1, 2008. With a growth of 2.3% and a net of 146,759 people, we can count ourselves fortunate to have a positive growth. Economists use population growth to determine how many new housing units will be in demand. According to a formula of 75% of new residents moving to a single-family unit with 2.7 persons per household, it suggests that the housing demand equals just fewer than 41,000 homes. That is indeed good news for our local economy and our housing market.

REASONS FOR OPTIMISM Why do economists predict that our economy should begin to recover late this year? There are many positive factors at play including low interest rates, lower consumer prices, federal spending and a sense of confidence in the new presidential administration. The Federal Reserve has allowed interest rates to fall to near zero in an effort to take the pressure off of battered banks, corporations and households. Mortgage rates are at historic lows, which have spurred an influx of mortgage applications and are sparking interest in would-be homebuyers. The plunge in oil prices, while it may only last several months, has helped consumers balance their budget. Food and other commodities are expected to stay modestly priced and inflation may stay in the 1% - 2% range. While the crises that have hit our economy have been unprecedented, so has the response from our federal government. The Federal Reserve pledged $800 billion in late 2008 to aid the credit card, auto loan and mortgage industries. $200 billion of that money will be spent to purchase securities backed by various types of debt. $500 billion goes to purchase mortgage-backed securities and another $100 billion to directly purchase mortgages held by struggling Fannie Mae and Freddie Mac. Newly inaugurated President Barack Obama has put together a stimulus program with the goal of creating 2.5 million jobs over the next two years. Obama has claimed a “mandate to move the country in a new direction,” and has a huge package of tax cuts at the ready. Political affiliations aside, many Americans find a sense of optimism with this new administration and the confidence of American citizens is a key factor to our economic recovery.

WHERE DOES METROPOLITAN PHOENIX STAND? As in other markets across the nation, Greater Phoenix’s housing situation continues to be troubled. In the near term, housing prices in some parts of the Valley will continue to decline as the number of foreclosed and distressed-seller properties on the market continues to increase. Foreclosed properties are a big factor not only in inventory levels, but price levels as well. According to Realty Studies, in association with the Morrison School of Management and Agribusiness at Arizona State University’s Polytechnic campus, 42.8% of all single-family resale home sales in Maricopa County in 2008 were foreclosed properties. The glut of foreclosures is putting a pricing pressure on all resale properties. (See the graph “Properties in the Foreclosure Process.”) In 2008, foreclosed sales averaged 84.7% of the sales price of non-foreclosed properties. Fortunately, many homeowners facing foreclosure are now opting for a short sale instead. 2009 may be a year in which short sales rise sharply, releasing the housing market from further foreclosure damage.

NOW, MORE THAN EVER, IS THE TIME TO BUY! With the declining prices over the last several months, savvy investors and owner-occupants are taking action on the good bargains to be had and are buying real estate. In fact, sales have increased dramatically in the second half of 2008 and into 2009. (See the chart “2008 Residential Sales Statistics.”) Whether home buyers are snatching up amazing deals on investment properties to fuel their wealth portfolio, or are purchasing the home of their

dreams as their own primary residence, they understand that conditions are very much in their favor to purchase now. (See the chart “Housing Affordability Index.”) This is a buyer’s market unlike anything Metropolitan Phoenix has ever seen. One’s choices in properties are numerous. Buyers can purchase the home they’ve always wanted for an extremely attractive price. Sellers are very motivated to make the transaction smooth and agreeable to the buyer’s terms. The buyer has the upper hand today. Financial consultants and investment gurus all over the nation ask, if you can have your choice of virtually anything you wanted, at an “on clearance sale” price, with the assumed knowledge that your purchase will appreciate beautifully in time, why wouldn’t you buy right now? Even Robert Kiyosaki, author of Rich Dad Poor Dad, says today “is the greatest time to buy real estate.” Add in extremely attractive mortgage rates and you can see that it doesn’t make any sense to sit on the sidelines to “wait and see.” The opportunity is great today. Wayne Stutzer, Senior Vice President and Financial Consultant with RBC Dain Rauscher, sums up today’s financial opportunity. “Interest rates are at historic lows. They haven’t been this low since the Eisenhower administration. This is the best time to make a long-term commitment. Don’t wait to buy. Once the economy begins to pick up again, mortgage interest rates will go up. The monetary component is very accommodative today.”

R E S I D E N T I A L R E A L E S TAT E

G E N E R A L E C O N O M I C S N A P S H O T

GDP Growth-1.8% in ’09, contraction

Interest RatesPrime at 3.25% in ‘09

10-year T-notes yielding 3%

InflationDeclining in

coming months

UnemploymentRising to nearly 9% by ‘09’s end

Crude OilAveraging

$63 a barrel in ‘09

Housing SalesA small pickup during ‘09

Retail Sales GrowthStruggling to stay

positive in ’09

Trade Deficit$446 billion,

3.2% of GDP in ‘09

Source: kiplingerbiz.com

National Economic Forecasts

10 Real Estate

Predictions for 2009• Sellerswillcontinuetofacefallinghomevalues because they’ll be competing with banks and builders who are slashing prices to sell off the still-huge inventory of foreclosures and new homes.

• TheObamaadministrationwillactonitsplanto crack down on abusive lending practices.

• Mortgageholdersindangeroflosingtheirhomes will receive more assistance from a variety of programs since the Senate’s Joint Economic Committee has predicted two million foreclosures in 2009.

• Banks’restructuringshouldbringincreasingcalm, making loan modifications and short sales easier to obtain. Eventually this will lead to a decrease in the number of bank-owned properties on the market.

• Mortgageapplicationswillcontinuetoreceivea comprehensive review, requiring borrowers to provide extensive income and debt documentation. Those with the best credit will get the best rates.

• Theforeclosurecrisishascreatedwiserconsumers with a deeper understanding of real estate, mortgages and credit; enabling better decision- making going forward.

• Greenisgoodwithincreasingnumbersofbuyers opting for smaller homes that are within walking distance of school and work.

• Buyersandsellerswillbemoreandmoretech savvy, relying on tools like video, webcasts, and mobile search. Consumers and practitioners will benefit from being ahead of the curve.

• Priceswillbelowaswillinterestrates,creating great buying opportunities, and likely, inspiring reluctant buyers to make their move.

• Therecessionwillendandbuyerswillregain confidence in the market.

Source: frontdoor.com, realtor.org

Who Lives in Maricopa County?Population ..........................................................................3,987,942

Persons 18+ years.....................................................................72.7%

Persons 65+ years.....................................................................11.1%

MedianHouseholdIncome ....................................................$53,549

High School Graduate or Higher ................................................83.7% (population 25+ years)

Bachelor’s Degree or Higher ......................................................27.2% (population 25+ years)

Homeownership Rate................................................................67.5%

Population in Labor Force .............................................................66% (population 25+ years)

MeanTravelTimetoWorkinMinutes ...........................................26.4

Born in the USA .........................................................................81.8%Source: US Census Bureau, 05-07 American Community Survey, AZ Dept. of Commerce

2008 Residential Sales Statistics Single-FamilyHomes/MaricopaCounty

Number of Sales Average Sold PriceJanuary ......................................2166 .......................................$339,000February .....................................2257 .......................................$321,000March .........................................3094 .......................................$329,000April ...........................................3528 .......................................$308,000May ............................................4054 .......................................$296,000June ...........................................4297 .......................................$287,000July ............................................4473 .......................................$270,000August .......................................4298 .......................................$255,000September .................................4796 .......................................$233,000October ......................................4146 .......................................$228,000November .................................3431 .......................................$219,000December...................................4309 .......................................$205,000Source: ARMLS. Information is deemed to be reliable, but not guaranteed.

Housing Affordability IndexMetropolitanPhoenix

2000, Q3 2006, Q3 2007, Q3 2008, Q3Source: NAHB, Elliott D. Pollack & Company

64.8

26.633.2

71.6

Properties in the Foreclosure Process MaricopaCounty2002-2008

30,000

25,000

20,000

15,000

10,000

5,000

0 Source: The Information Market, Elliott D. Pollack & Company

It’s important to note that our housing market is made up of a myriad of micro-markets. So what rings true for some parts of the Valley is not the case in others. Further, statistics gleaned from Valley wide sales figures aren’t necessarily indicative of what’s occurring in one’s specific neighborhood. Your Realtor is your best source for localized real estate statistics specific to where you live.

1/02 1/03 1/04 1/05 1/06 1/07 1/08

OUR ECONOMY IN RECESSION While the “R” word was gingerly bantered around in early 2008, there is no doubt that the US is in the middle of a full-fledged recession here in 2009. “Recessions are messy and downright scary, but they eventually come to an end with the stage set for the return of prosperity,” says Marshall Vest, an economist with the University of Arizona. Our current recession, which really began to touch Arizona in the third quarter of 2007, is expected to be the longest and deepest recession in our state’s history. “This recession should bottom out in the second half of 2009. This is not equal to the Great Depression. It may be the ‘worst since’, but the US has been through ten recessions since WWII and the bad times eventually and always fade. When things appear bleakest, recovery is not too far off,” Vest notes. Most local and national economists agree that 2009 will bring the economy a recovery, specifically in the second half. The first half of the year, though, is expected to be tough.

ECONOMIC INDICATORS Job losses and unemployment applications continue to mount. National jobless claims are running at over 550,000 per week now and predictions are that national unemployment figures may rise to nearly 9% by the end of the year. Consumer confidence and retail sales are expected to improve slightly in 2009. Metropolitan Phoenix’s retail sales are expected to grow 0%. A 0% growth may not appear to be worth noting as a positive, but that’s in comparison to 2008’s decline of 10%. (Source: Elliott D. Pollack & Company, AZ Blue Chip and Department of Commerce.) The Metropolitan Phoenix commercial real estate markets will have a rough 2009. Apartment vacancies are expected to rise, office vacancy rates may approach 18% by year end (source: Greater Phoenix Blue Chip Real Estate Consensus), and the industrial market will also see a downward pressure on rents and increased vacancy rates.

WHAT’S THE GOOD NEWS? On December 22, 2008, the US Census Bureau released good news for Arizona. Arizona was the second fastest-growing state between July 1, 2007

and July 1, 2008. With a growth of 2.3% and a net of 146,759 people, we can count ourselves fortunate to have a positive growth. Economists use population growth to determine how many new housing units will be in demand. According to a formula of 75% of new residents moving to a single-family unit with 2.7 persons per household, it suggests that the housing demand equals just fewer than 41,000 homes. That is indeed good news for our local economy and our housing market.

REASONS FOR OPTIMISM Why do economists predict that our economy should begin to recover late this year? There are many positive factors at play including low interest rates, lower consumer prices, federal spending and a sense of confidence in the new presidential administration. The Federal Reserve has allowed interest rates to fall to near zero in an effort to take the pressure off of battered banks, corporations and households. Mortgage rates are at historic lows, which have spurred an influx of mortgage applications and are sparking interest in would-be homebuyers. The plunge in oil prices, while it may only last several months, has helped consumers balance their budget. Food and other commodities are expected to stay modestly priced and inflation may stay in the 1% - 2% range. While the crises that have hit our economy have been unprecedented, so has the response from our federal government. The Federal Reserve pledged $800 billion in late 2008 to aid the credit card, auto loan and mortgage industries. $200 billion of that money will be spent to purchase securities backed by various types of debt. $500 billion goes to purchase mortgage-backed securities and another $100 billion to directly purchase mortgages held by struggling Fannie Mae and Freddie Mac. Newly inaugurated President Barack Obama has put together a stimulus program with the goal of creating 2.5 million jobs over the next two years. Obama has claimed a “mandate to move the country in a new direction,” and has a huge package of tax cuts at the ready. Political affiliations aside, many Americans find a sense of optimism with this new administration and the confidence of American citizens is a key factor to our economic recovery.

WHERE DOES METROPOLITAN PHOENIX STAND? As in other markets across the nation, Greater Phoenix’s housing situation continues to be troubled. In the near term, housing prices in some parts of the Valley will continue to decline as the number of foreclosed and distressed-seller properties on the market continues to increase. Foreclosed properties are a big factor not only in inventory levels, but price levels as well. According to Realty Studies, in association with the Morrison School of Management and Agribusiness at Arizona State University’s Polytechnic campus, 42.8% of all single-family resale home sales in Maricopa County in 2008 were foreclosed properties. The glut of foreclosures is putting a pricing pressure on all resale properties. (See the graph “Properties in the Foreclosure Process.”) In 2008, foreclosed sales averaged 84.7% of the sales price of non-foreclosed properties. Fortunately, many homeowners facing foreclosure are now opting for a short sale instead. 2009 may be a year in which short sales rise sharply, releasing the housing market from further foreclosure damage.

NOW, MORE THAN EVER, IS THE TIME TO BUY! With the declining prices over the last several months, savvy investors and owner-occupants are taking action on the good bargains to be had and are buying real estate. In fact, sales have increased dramatically in the second half of 2008 and into 2009. (See the chart “2008 Residential Sales Statistics.”) Whether home buyers are snatching up amazing deals on investment properties to fuel their wealth portfolio, or are purchasing the home of their

dreams as their own primary residence, they understand that conditions are very much in their favor to purchase now. (See the chart “Housing Affordability Index.”) This is a buyer’s market unlike anything Metropolitan Phoenix has ever seen. One’s choices in properties are numerous. Buyers can purchase the home they’ve always wanted for an extremely attractive price. Sellers are very motivated to make the transaction smooth and agreeable to the buyer’s terms. The buyer has the upper hand today. Financial consultants and investment gurus all over the nation ask, if you can have your choice of virtually anything you wanted, at an “on clearance sale” price, with the assumed knowledge that your purchase will appreciate beautifully in time, why wouldn’t you buy right now? Even Robert Kiyosaki, author of Rich Dad Poor Dad, says today “is the greatest time to buy real estate.” Add in extremely attractive mortgage rates and you can see that it doesn’t make any sense to sit on the sidelines to “wait and see.” The opportunity is great today. Wayne Stutzer, Senior Vice President and Financial Consultant with RBC Dain Rauscher, sums up today’s financial opportunity. “Interest rates are at historic lows. They haven’t been this low since the Eisenhower administration. This is the best time to make a long-term commitment. Don’t wait to buy. Once the economy begins to pick up again, mortgage interest rates will go up. The monetary component is very accommodative today.”

R E S I D E N T I A L R E A L E S TAT E

G E N E R A L E C O N O M I C S N A P S H O T

GDP Growth-1.8% in ’09, contraction

Interest RatesPrime at 3.25% in ‘09

10-year T-notes yielding 3%

InflationDeclining in

coming months

UnemploymentRising to nearly 9% by ‘09’s end

Crude OilAveraging

$63 a barrel in ‘09

Housing SalesA small pickup during ‘09

Retail Sales GrowthStruggling to stay

positive in ’09

Trade Deficit$446 billion,

3.2% of GDP in ‘09

Source: kiplingerbiz.com

National Economic Forecasts

10 Real Estate

Predictions for 2009• Sellerswillcontinuetofacefallinghomevalues because they’ll be competing with banks and builders who are slashing prices to sell off the still-huge inventory of foreclosures and new homes.

• TheObamaadministrationwillactonitsplanto crack down on abusive lending practices.

• Mortgageholdersindangeroflosingtheirhomes will receive more assistance from a variety of programs since the Senate’s Joint Economic Committee has predicted two million foreclosures in 2009.

• Banks’restructuringshouldbringincreasingcalm, making loan modifications and short sales easier to obtain. Eventually this will lead to a decrease in the number of bank-owned properties on the market.

• Mortgageapplicationswillcontinuetoreceivea comprehensive review, requiring borrowers to provide extensive income and debt documentation. Those with the best credit will get the best rates.

• Theforeclosurecrisishascreatedwiserconsumers with a deeper understanding of real estate, mortgages and credit; enabling better decision- making going forward.

• Greenisgoodwithincreasingnumbersofbuyers opting for smaller homes that are within walking distance of school and work.

• Buyersandsellerswillbemoreandmoretech savvy, relying on tools like video, webcasts, and mobile search. Consumers and practitioners will benefit from being ahead of the curve.

• Priceswillbelowaswillinterestrates,creating great buying opportunities, and likely, inspiring reluctant buyers to make their move.

• Therecessionwillendandbuyerswillregain confidence in the market.

Source: frontdoor.com, realtor.org

Who Lives in Maricopa County?Population ..........................................................................3,987,942

Persons 18+ years.....................................................................72.7%

Persons 65+ years.....................................................................11.1%

MedianHouseholdIncome ....................................................$53,549

High School Graduate or Higher ................................................83.7% (population 25+ years)

Bachelor’s Degree or Higher ......................................................27.2% (population 25+ years)

Homeownership Rate................................................................67.5%

Population in Labor Force .............................................................66% (population 25+ years)

MeanTravelTimetoWorkinMinutes ...........................................26.4

Born in the USA .........................................................................81.8%Source: US Census Bureau, 05-07 American Community Survey, AZ Dept. of Commerce

2008 Residential Sales Statistics Single-FamilyHomes/MaricopaCounty

Number of Sales Average Sold PriceJanuary ......................................2166 .......................................$339,000February .....................................2257 .......................................$321,000March .........................................3094 .......................................$329,000April ...........................................3528 .......................................$308,000May ............................................4054 .......................................$296,000June ...........................................4297 .......................................$287,000July ............................................4473 .......................................$270,000August .......................................4298 .......................................$255,000September .................................4796 .......................................$233,000October ......................................4146 .......................................$228,000November .................................3431 .......................................$219,000December...................................4309 .......................................$205,000Source: ARMLS. Information is deemed to be reliable, but not guaranteed.

Housing Affordability IndexMetropolitanPhoenix

2000, Q3 2006, Q3 2007, Q3 2008, Q3Source: NAHB, Elliott D. Pollack & Company

64.8

26.633.2

71.6

Properties in the Foreclosure Process MaricopaCounty2002-2008

30,000

25,000

20,000

15,000

10,000

5,000

0 Source: The Information Market, Elliott D. Pollack & Company

It’s important to note that our housing market is made up of a myriad of micro-markets. So what rings true for some parts of the Valley is not the case in others. Further, statistics gleaned from Valley wide sales figures aren’t necessarily indicative of what’s occurring in one’s specific neighborhood. Your Realtor is your best source for localized real estate statistics specific to where you live.

1/02 1/03 1/04 1/05 1/06 1/07 1/08

Produced by Desert Lifestyle Publishing • 480.460.0996

2008 Sales Statistics By Community

2008 Average Sales Price By City

Community Average Days On List/Sell # Sales Price Market Price Ratio Closed

Ancala ........................................$1,225,000 ................. 213 ................... 92 ...........................10 Bellasera ........................................$661,470 ................. 146 ................... 92 ...........................17 Boulders ......................................$1,067,794 ................. 166 ................... 93 ...........................17 DC Ranch......................................$965,484 ................. 163 ................... 94 ...........................91 Desert Highlands .......................$1,867,388 ................. 288 ................... 84 ...........................18 Desert Mountain ........................$2,227,782 ................. 224 ................... 90 ...........................59 Desert Summit ...............................$958,286 ................. 242 ................... 92 ............................7 Eagle Mountain ............................$746,444 ................. 157 ................... 92 ...........................17 Estancia ......................................$3,061,062 ................. 483 ................... 88 ............................8 FireRock ......................................$2,050,500 ................. 261 ................... 89 ...........................20 Gainey Ranch ...........................$1,119,170 ................. 139 ................... 93 ...........................17 Grayhawk .....................................$677,914 ................. 165 ................... 94 ...........................93 Ironwood Village ..........................$526,824 ................. 125 ................... 95 ...........................17 Legend Trail ...................................$701,597 ................. 212 ................... 94 ...........................44 McCormick Ranch .......................$585,791 ................. 153 ................... 94 ...........................25 McDowell Mountain Ranch ........$609,694 ................. 150 ................... 95 ..........................159 Mirabel Club ..............................$2,335,625 ................. 250 ................... 93 ............................8 Pinnacle Peak ............................$1,164,195 ................. 213 .................. 87 ..........................38 Scottsdale Mountain ...................$862,869 ................. 213 ................... 93 ...........................27 Scottsdale Ranch .........................$650,525 ................. 161 ................... 94 ...........................48 Sincuidados ...............................$1,140,000 ................. 203 ................... 96 ............................8 Silverleaf .....................................$3,079,135 ................. 288 ................... 89 ...........................22 Stonegate .....................................$648,060 ................. 153 ................... 95 ...........................31 Terravita .........................................$603,848 ................. 137 ................... 96 ...........................56 Troon North ....................................$840,540 ................. 199 ................... 91 ...........................60 Troon Village .................................$926,901 ................. 209 ................... 93 ...........................52 Whisper Rock .............................$3,050,364 ................. 332 ................... 94 ...........................12 Winfield ..........................................$551,688 ................. 171 ................... 92 ...........................12

Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.(Single-Family Residences)

Statistics gathered from ARMLS. All information deemed reliable but not guaranteed.(Single-Family and Multi-Family Residences)

Scottsdale: $562,774

Gilbert: $268,258

Mesa: $207,806

Chandler: $278,036

Peoria: $242,251

Glendale: $195,947

Carefree: $799,752

Cave Creek: $464,659

Phoenix: $212,623

Litchfield Park: $254,267

Paradise Valley: $1,979,803

Fountain Hills: $474,747

Tempe: $260,365

The Local and National Economy Are We on Track for a Recovery?

Buying Real Estate How Do You Know When the Time is Right?

M E T R O P H O E N I X

10 Real Estate Predictions for 2009

As I write to all of you about the state of our current housing market and what we may be facing in upcoming months and perhaps years ahead, I am reminded of an often-used quote that “knowledge is power and the application of that knowledge is empowering.” As of this date, we know that our home prices valley-wide have plummeted nearly 40% in this past year which matches the spike we experienced in 2005. One can only wonder if we have hit bottom and can foresee an increase in values and sales in upcoming months. If that were the only factor to consider, the answer might be a probable “yes.” However, there are other factors we need to take into consideration as all of us make our financial plans going forward. Job growth, which has long been held as one of the key indicators impacting housing, has exceeded 3% annually for the past 15 years. When we surface from this economic crisis, the Southwest will return to strong population and job growth for the sheer fact of the availability of land. Our present job growth rate, however, is a -2%. Currently, according to RL Brown, one of the foremost housing experts in Arizona, “It is difficult to find areas of the Valley from Pinal to Peoria where any new construction occurs.” Recently some parallels were drawn between what we are seeing today in the financial and housing sectors with the “crash of the 80s” and the S & L crisis. It is important to note that one striking difference is that the center of the 80s’ crash was commercial real estate which affected far fewer people than today’s crisis centered in the housing market. As many of the major markets nationwide experience shrinking home sales, homeowners relocating to Arizona are either forced to cancel, delay or rent as they wait for their homes to sell in their previous locations. Lending guidelines have tightened and “creative” loans have disappeared. With over half of the active inventory comprised of short sales and foreclosures, and 80% of current closings from those same two categories, only serious sellers who understand the dynamics of the current market will succeed. Although today’s sales are not as profitable as in recent years, the opportunity to buy and finance a home at an unprecedented value more

than makes up for the profit loss on the sale. For those who continue to try to time “the bottom” of the market most surely will miss one of the best buying markets in recent history.

Henderson consistently ranks among the top ten individual RE/MAX agents in Arizona and is a recipient of the Business Journal Real Estate Leadership

Award for 2005. Her charitable works include Habitat for Humanity, Children’s Miracle Network and the Susan G. Komen Foundation.

THE GAYLE HENDERSON GROUPABR • CRS • GRI • e-Pro • CLHMS • CDPE

RE/MAX Excalibur8510 E. Shea Blvd. #100 • Scottsdale, AZ 85260

602.850.4335 • [email protected]

AZMovingPlan.com

Gayle HendersonPresents

2009 Metro Phoenix Economic Snapshot

If your home is currently listed, this is not a solicitation for that listing. We’re Fair Housing Providers