Real Estate overview for November '06

We certainly have had our share of dispiriting market news for Arizona lately.

Well, today the American Association of Realtors dropped the lastest bomb on the our local real estate market. Arizona was include in the three most heavily impacted real estate markets in the country.

Negatively impacted that is.

So, according to the Association, Arizona, California and New Mexico are experiencing the deepest market corrections.

If you have been trying to sell or buy a home, this is not new news for you.

Almost everyone who owned real estate in the Phoenix area experienced a 50% or so increase in the value of their home during 2005. Now it appears, we are having to give some of it back.

If you are down in the dumps because of curent prices, here is one way to look at it. Before the big surge in 2005, home prices were increasing a predictable 1 - 1 1/2 percent per month. Investor money changed all that last year.

But in evaluating what your home should really be worth, take its value at the beginning of 2005, factor in a 1% per month increase (12% for the year), add that to the initial value and that is close to what you home would be worth without last year's artifical run up.

Now, you can probably currently get more than that amount for your home but until prices fall below that recalculated amount, you are still ahead of the game.

So cheer up. No one has actually lost money in Phoenix area real estate over the past 18 months or so, nor are they likely to. Unless you house burned down or a car drove into the living room, you are still in a pretty good investment.

If you borrowed against all that new equity, do your darnest to get that equity loan paid down or paid off. You will sleep better at night.

If you want help establishing the current value of your home, give me a call or email me and I'll help you sort it out.

Richard