First-Time Buyers Becoming a Larger Segment of the Phoenix Real Estate Market

Some analysts are saying that the upswing in market activity is the result of another speculator's boom. Lately there has been a foreclosure buying frenzy happening across the valley which has come to the attention of other parts of the country. While there's no doubt that investors are finding great bargains out there, especially in older areas of the valley, they are not dominating the market like they did in '04-'06. Last month 19% of home sales were to investors, according to Mike Orr of the Cromford Report, a housing data tracking service that monitors stats of the Phoenix area real estate market. During the boom 35-40% of sales were to investors.

First-timers are the fastest growing group of home buyers right now. It is believed me some that it will represent as much as half of home sales very soon. And remember, first-time buyers have the $8,000 tax credit coming back to them from the government. There are other programs in the works, i.e. Neighborhood Stabilization, etc, that is more geared toward owner-occupant buyers vs. investors.

We are at record home sales levels, and prices are moving up. Median price is $116,500, up from $115,000 at the end of April, representing a 1.3% increase. While it may not sound exciting, a year of this would be over 15% in appreciation.

$/square foot prices for active and pending homes climbed as well, now at $84.86.

The price range for homes under $150,000 are now receiving multiple offers and are now often times sold in a few days rather than weeks or months.

Most investors are now paying cash for homes. It's a different breed, not the speculator type we saw a few years ago that put 0 down and could easily walk away. Investors who finance are having to put down 20-25% minimum to purchase. They aren't likely to walk away from these obligations.

The market is seeing a surge of seasoned, experienced, and conservative investors and savvy first-time buyers - this is a much different market than seen in previous years.