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Like any industry, the key to success is adaptability and a willingness to change.

The East Valley Tribune had a semi-positive article on the housing market today.  There’s no need to summarize it as you can read it yourself.

What do you think?

The Gilbert, Arizona real estate market continued it’s recent trends of price drops, seeing an average sales price of  $266,863 - down from $274,340 from the month before.

Take a look at this graph which shows the two-year price averages in Gilbert:

Gilbert, Arizona Single-Family Home Prices Over The Past Two Years. Click to enlarge. View raw data.

In the graph above:

• the blue line indicates the average price of single-family homes currently listed in Gilbert.

• the green line indicates the list price for single-family homes before being sold. In other words, this is the average price for all listings that went under contract before the final sales price was agreed upon by the buyer and seller through contract negotiations.

• the yellow line indicates what the average sales price was for single-family homes in Gilbert.

Overall, prices for single-family homes in Gilbert seem to be stablizing right around the $270,000 mark.

Like much of the Phoenix valley, the year-over-year price decline chart is not a pretty picture:

Gilbert Year-Over-Year Price Change. Click to enlarge.

The price of the average sold single-family home in Gilbert dropped 35% from August 2007 to August 2008.  While prices appear to be stablizing around $270,000, this past year has been brutal for homeowners.  Only time will tell if we are actually at the bottom of this real estate market correction.

Single-family homes are continuing to sit on the market for less time:

The average days on market for single-family homes in Gilbert, Arizona. Click to enlarge.

On average, single-family homes in Gilbert are sitting for 91 days before they are sold.  This is the lowest time on market since July 2007, which saw 82 days on the market.  This is a good sign for the real esate market - homeowners who price their home correctly, based on their local market conditions, will sell their home!

Finally, check out this information on the months of inventory in Gilbert:

The months of inventory in Gilbert, Arizona. Click to enlarge.

As a reminder:

• Less than six months of inventory indicates a “seller’s market.” In a seller’s market there are more buyers than there are homes to purchase. As a result, real estate prices may increase during a seller’s market because there is less inventory than there are buyers. This is what happened during the 2004 - 2006 real estate boom in Phoenix.

• More than six months of inventory indicates a “buyer’s market.” In a buyer’s market, real estate will often sell below the listing price because there are more buyers than inventory. Much of the country has experienced an extreme buyer’s market over the past year or two.

• Six months of inventory indicates a “balanced market.” This is the most desirable market for buyers and sellers alike. Homes will typically sell near listing price because there is a balanced amount of inventory when compared to buyers. Sellers who market their property correctly and at the current market price will often receive an offer near that list price. Buyers are more confident in purchasing because prices are stable or appreciating.

August 2008 inventory levels stayed at around the six-month mark indicating, overall, Gilbert is in a balanced market.  In balanced markets, prices have a better chance at staying stable as supply and demand are in check.

Are we at the proverbial bottom of this correction?  It’s too early to tell.  There are many outside factors that continue to affect consumer confidence including this past weekend’s sale of Merill Lynch to Bank of America and the fall of Lehman Brothers on Wall Street.  Many economists are actually predicting a decline in mortgage rates as a result - which could translate into more buyers jumping into the market.

If you’re interested in purchasing a home in Gilbert, you can search our site casually or set up a fusionpower search - giving you a powerful personal and secure webpage with homes that meet your search criteria!

As a result of the Freddie and Fannie fallout - mortgage rates have dropped quite a bit today!  This is great news for buyers who have been turned off by the recent spike in rates as well as for those who want to refinance to lower their rate.

Check out these articles for some great information on what the Freddie and Fannie fallout means to you:

• Update on Freddie and Fannie | Bloodhound Blog
• Fannie, Freddie bailout to help consumers | Bankrate

Party time.

With Labor Day here it means that Phoenix valley residents can take solace in the idea that over the next month we’ll start to see temperatures routinely top out at less than 100 degrees.  Sure, it may be 99 or 98 but there’s something magical to a Phoenician when the high is “only 98″ and doesn’t venture into the triple digits.  I type this as I see this Friday’s high is 110.  Spicy.  September starts out very humid but as the month wanes on the dry air eventually returns and the high-90’s aren’t that bad in the shade or next to a pool.  Or in a beer tent.

Unlike much of the country, Phoenix and its suburbs throw numerous festivals throughout the fall, winter and spring.  We take the summer off because it’s too hot to party unless you’re tubing in a cold river or up north in the cool mountains.  Although September is not nearly as full of festivals as October will be - here are some ideas of what to do during September:

Chandler, AZ

• Downtown Art Walk | Wednesday, September 3 | 5 - 9 PM | What started out less than a year ago as a simple art walk to encourage residents to spend evenings in Historic Downtown Chandler has grown into a very respectable event featuring artists and crafts and even street performances.  Check out Historic Downtown Chandler’s website for more information.  The Art Walk occurs on the first Wednesday of every month.
• GetOut Performing Arts Expo | Saturday, September 6 | 10 AM - 3 PM | Formerly at the Scottsdale Center for the Arts, this FREE morning and afternoon features mini-performances from groups all over the Phoenix valley to give residents a “taste” of what’s to come this performance season.  Afterward, there will be ‘pedal cabs’ whisking you away to Historic Downtown Chandler for lunch and shopping.  Go here for more info.
• Starlight Concert Series | Every Tuesday :: September 9 - October 28 | 7 - 8:30 PM | Every Spring and Fall the City of Chandler has free concerts at Tumbleweed Park on the corner of McQueen and Germann Roads.  For the lineup of what bands will be playing, go here.
• Meadowlark at the Chandler Center For The Arts | Friday, September 19 | 7:30 PM | Not really a festival but I thought I’d mention it because it’s part of the Chandler Center for the Arts‘ FREE summer concert series.  For more information, go here.

Gilbert, Arizona

• 17th Annual So Long To Summer Fest | Saturday, September 27 | Phoenicians like the end of the brutal heat so much that we throw a party to commemorate it.  Have you ever seen a “So Long To Winter Fest” in the Midwest or East Coast?  I didn’t think so.  This fair-like event is centered around families and kids but also includes a food and beverage area and a concert stage.  For more information, surf on over here.

Tempe, Arizona

• ASU Football | Not officially a festival but definitely much fun!  ASU fans and students know how to have a good time.  The party usually starts in the fields and parking lots surrounding Sundevil Stadium and then pours into the bars and restaurants on Mill Avenue after the game.  Arizona State has home games on:
  - Saturday, September 6 | Stanford at ASU | 7 PM | Buy tickets
  - Saturday, September 13 | UNLV at ASU | 7 PM | Buy tickets
• YFest | Saturday, September 6 | 11 AM - 2 PM | YFest at Tempe Marketplace “celebrates and raises awareness of the power of youth to change the world.”  What may be just as interesting are the youth performers  - bands, dancers, singers, etc. - that will fill Tempe Marketplace, an outdoor mall at the corner of Loops 101 and 202.  More information can be found here.
• Way Out West Oktoberfest | October 3, 4 and 5 | Okay, it’s not in September but you should pre-plan now.  There’s a kid-friendly “festival within a festival” at Kinderfest while those who like to indulge in a beer or two can enjoy the many beer tents and concerts at Tempe Beach Park.  Get more info here.

And if you just can’t take this last month of heat, check out the Arizona Republic’s “Fall Festival Guide” for informatin on festivals throughout Arizona, many in cooler locales like Flagstaff.

An idea I’ve borrowed from another real estate blogger, Chad Huck…

Go Indiana Hoosiers! (We always need football support)

Go Tennesee Volunteers!

Go Arizona Sundevils!

Hot on the heels of the inaugural episode of ‘Fusion Vision’ is the second episode featuring Arizona Monsoon Storms.  This year we switched from designating the Monsoon Season’s beginning as “three consecutive days of 55+ degree dew points” to “June 15 - September 30.”  The monsoon season brings with it amazing (and dangerous) lightening storms to the Phoenix valley.  Sometimes torrential downpours can occur - in fact, last night’s monsoon storms that are making national news actually brought just under an inch of rain in less than an hour to Phoenix Sky Harbor Airport and winds of 86 miles per hour!

I also heard on the news today that this was the most dangerous monsoon storms since 1996 to hit the Phoenix area - and we loved every minute of it!

Although most of the year Phoenix enjoys a dry heat it’s quite humid this time of the year with dew points sometimes reaching well into the 70’s making it quite miserable!

Here is the second episode of Fusion Vision featuring Arizona’s Monsoon Storms:

[If you are reading via a Feed Reader you'll need to click through to view and to comment]

Here are some additional facts on the monsoon.

We’re diving into video.  And we’re not talking home virtual tours with a slideshow of Carl Burns effected photos - they’re yesterday’s news.  We’re actually not even talking about specific homes.

Today, we’re proud to bring you Fusion Vision!  The goal is to bring readers a firsthand look at (mostly) Southeast Phoenix Valley communities and attractions.  From housing communities and buildings to favorite restaurants to quick tours of shopping areas and scenic attractions, Fusion Vision is our way of bringing a little piece of the Valley of the Sun to people all over the world.

Fusion Vision is by no means a professionally cut end product.  Fusion Vision is created by a man and his will… and an Apple MacBook, iMovie software and a fantastic Panasonic LUMIX DCM-TZ5 digital camera that records both HD video as well as takes fantastic photographs.

So, drum roll please …

By the way, if you want to get the feel for a Fusion Power Search personal website, you can view our sample site for Seville here as well as get a feel for the vast range of homes on the resale market in Seville.  At posting, listings ranged from $170,000 to $2.7M.

• Username: sevillesample
• Password: fusionpower
• Fusion Power Search Website

With a Fusion Power Search, you have your own, personal and secure website that constantly updates from the Arizona Regional Multiple Listing Service.  You can save your favorite homes, throw out ones you don’t like, view all homes or just your favorites on a map - even cross reference homes with tax information.  You can also ask additional questions on a listing or schedule a time to view your favorite homes in person!

Fusion Power Search is a result of the fantastic new MLS system we have here in Phoenix.

USAToday website on August 26, 2008

There you have it!  USAToday shows the first “glimmer of hope” article I’ve seen in the mainstream media since the housing market began to tank.

There’s no need to repeat the article, you can read it here.  In general, the report from USAToday aligns with the year-over-year price drops that we recently posted for Tempe, Chandler and Gilbert.  USAToday reported a 27.9% drop in the Phoenix market over the past year.

The media plays an important role in creating the public’s mood for many things, including the real estate market.  So it’s nice to see a non-doom-and-gloom story.  As always, buyers and sellers should look at the actual and most recent data from a real estate professional and decide for themselves if now is a good time to buy or sell real estate.

Gilbert covers a large area of land in the far southeast Phoenix valley.  It’s the furthest community from central Phoenix but offers plenty of amenities and options for residents - with more shopping, dining and recreational attractions seemingly popping up over night.  In fact, Gilbert is the fastest-growing big suburb in America, absorbing many of the 115,000 net people that moved to Phoenix in 2006!

With so many people moving to Gilbert one might think that the real estate market may have fared a little better compared to other locations in the Phoenix valley.  Unfortunatley, that is not the case.  Gilbert is home many new home builders with swaths of land ready to add thousands of new homes.  This meant a few things for Gilbert over the past two years:

1. Because new home builders have much deeper pockets than traditional home sellers, they were able to compete by dropping their prices to make their homes cheaper than resell homes.
2. As a result, traditional home sellers - even those who may have purchased the home as a new build a year prior - have had to drop their prices to compete with the glut of new homes (that is, if they wanted to actually sell their home).
3. Because new home builders also offered “Zero Down” financing, many new home buyers have found themselves with negative equity if they bought at the height of the real estate market.
4. The end result is that home prices in Gilbert have declined dramatically over the past two years like most of the Phoenix real estate market.

Just how much have prices declined?  The following graph shows the average prices for homes listed in the Arizona Regional Multiple Listing Service:

Two-Year Pricing Statistics in Gilbert, Arizona. Click to enlarge.

You can view the raw data for this article here.

In the graph above:

• the blue line indicates the average price of single-family homes currently listed in Gilbert.
• the green line indicates the list price for single-family homes before being sold.  In other words, this is the average price for all listings that went under contract before the final sales price was agreed upon by the buyer and seller through contract negotiations.
• the yellow line indicates what the average sales price was for single-family homes in Gilbert.

Like much of the Phoenix real estate market, Gilbert’s prices really started to decline in the last quarter of 2007 and have started to stabilize over the past three months.  From a height of $367,183 in December of 2006, the average sold home now sells for $274,340 in Gilbert.

As in our previous analysis of Tempe and Chandler, Gilbert’s homeowners may be facing negative equity positions.  Take this simple example:

If Average Joe purchased a home in December 2006 for the average selling price of $367,183 with 20% ($73,437) down, he would’ve taken out a mortgage for $293,746.  If his home’s value was July 2008’s current selling average of $274,340, he’d have a negative equity of $19,406.  If Average Joe’s home appreciates 5% a year, on average, his home will be able to sell for what he purchased it for in six years.

This, of course, is a very ideal situation.  It’s assuming Average Joe put down 20% and we are at the bottom of the pricing declines as of July 2008.  Still, in this more-than-ideal situation, Average Joe won’t be able to sell his home for the same as he bought it until July 2014.  But, Average Joe shouldn’t have too many worries if he actually purchased his home to live in and plans on being in it for the next seven to ten years.

In terms of the percentage of decline year-over-year, here’s what average selling prices in Gilbert have done over the past year:

The percent change in single-family home prices in Gilbert, Arizona over the past year. Click to enlarge.

Taking in these two pieces of data - average selling prices and year-over-year-declines - a few things should be noted:

• Average selling prices in Gilbert, Arizona’s single-family home real estate market appear to be stabilizing.
• The average selling price has been in the high $270,000’s since March 2008.

If prices appear to be stabilizing, then how long are homes sitting on the market in Gilbert?  Take a look at this information:

The Average Days on Market For Single-Family Homes in Gilbert, Arizona. Click to enlarge.

As in Tempe and Chandler, late 2007 and early 2008 saw the longest time period.  Maxing out at 120 days in February 2008, the ADOM in Gilbert has been flirting with 100 days since March of 2008.  The spike in January and February 2008 could be attributed to the “slow season” of real estate.  On average, however, Gilbert’s ADOM has been prety steady throughout the two-year time period at about 97 days.  This could be a result of Gilbert’s fast-growing nature discussed earlier.

And, drum roll, please … let’s look at the inventory levels in Gilbert.  As always:

• Less than six months of inventory indicates a “seller’s market.” In a seller’s market there are more buyers than there are homes to purchase.  As a result, real estate prices may increase during a seller’s market because there is less inventory than there are buyers.  This is what happened during the 2004 - 2006 real estate boom in Phoenix.
• More than six months of inventory indicates a “buyer’s market.” In a buyer’s market, real estate will often sell below the listing price because there are more buyers than inventory.  Much of the country has experienced an extreme buyer’s market over the past year or two.
• Six months of inventory indicates a “balanced market.” This is the most desirable market for buyers and sellers alike.  Homes will typically sell near listing price because there is a balanced amount of inventory when compared to buyers.  Sellers who market their property correctly and at the current market price will often receive an offer near that list price.  Buyers are more confident in purchasing because prices are stable or appreciating.

Here is where Gilbert’s single-family home market stands:

The inventory levels in Gilbert, Arizona's single-family real estate market for the past two years. Click to enlarge.

July 2008 reached the magic number of six months!  In fact, a full month of inventory was dropped from June 2008 to July 2008 (7.2 months to 6.2 months).  Gilbert has been returning to a balanced market as of late.  It should be noted that May, June and July are often brisk real estate selling months as families use summer break to move and relocate.  It will be interesting to see what August 2008 brings.

There are still outside factors that can’t be controlled for all of the Phoenix Valley’s real estate market.  Those include foreclosures and the credit-crisis.  Many news reports have indicated that foreclosures have peaked in Phoenix - which is a good thing.  As the foreclosures on the market are bought up prices can continue to stabilize.  The credit-crisis continues to be a big factor in the real estate market as buyers are finding they can’t get approved for mortgages even with decent credit.

And with the recent changes in FHA Mortgage Loans that take effect on October 1, more buyers may be pushed out of the market.  Currently, a buyer needs 3% down for an FHA mortgage.  On October 1, that requirement increases to 3.5%.  The larger concern, however, is that FHA will no longer allow sellers or home builders to gift the down payment - which has been a key selling point for builders over the past few years with “zero down” offerings as well as for motivated sellers to get their home sold.

Overall, the single-family real estate market in Gilbert, Arizona appears to be stabilizing.  Average prices have stabilized in the high $270,000’s since the second quarter of 2008 while inventory levels have stabilized to just over 6 months in July 2008.

If you’re interested in purchasing a home in Gilbert, you can search our site casually or set up a fusionpower search - giving you a powerful personal and secure webpage with homes that meet your search criteria!