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Good News in Phoenix Real Estate - by Gary Kiernan

At last, some good news for the Phoenix real estate market? Well, yes, but...

As I write this article, in the dying days of March, it seems that there may be a light at the end of the tunnel; and I do not believe it is a train coming towards us!

It has been reported, on a nation-wide basis, that existing home sales in February, 2008, actually rose. Something that has not occurred in seven months. So that gives us one reason for cautious optimism.

Also, the weakening of the U.S. dollar is not all bad news. It has made homes here in the United States a very attractive proposition for overseas buyers, and we have noticed a sizable increase in inquiries. Particularly from our neighbors in the north, many of whom seek retirement homes here in the Phoenix area, as a respite from the frigid temperatures that Canada often endures.

Locally, the news is a mixed bag depending on your geographical location. Carefree lived up to its name, reporting a median price 6.7% higher than last year, at $944,000. At the other end of the scale, Queen Creek saw a 19% drop in median prices. Why the disparity? Queen Creek is an entry-level community that appealed to a lot of first-time buyers, and "investors", that have been affected by the whole sub-prime mess. Consequently, the level of foreclosures and short-sales, plus the abandonment by said 'investors' has, naturally, had a detrimental effect on prices. Hopefully, this year will see these homes absorbed by real end-users to bring some level of stability back to the market.

Conversely, Carefree is an extremely upmarket, witness the median price, mostly retirement community that has emerged relatively unscathed by the vagaries of the real estate world. The reported increase of 6.7%, on the back of just 70 sales in 2007, reflects the fact that wealthy retirees, or snow-birders, who did not have to sell, are able to ride out the rough times. Also, wealthy buyers are able to pay higher prices for the quality that Carefree provides.

Interestingly, neighboring Cave Creek reported a drop of 4.7% in 2007 to $505,000. The reasons for this, I believe, are a little more nuanced. For reporting purposes zip code 85331 is used for Cave Creek. It does not make a distinction between houses actually in Phoenix, generally south of Carefree Highway, that share the zip code by post office whim. Home prices in "actual" Cave Creek have been quite resilient, but the statistics have been skewed slightly by the "not real" Cave Creek sales.

To sum up, things are starting to look up and I think 2008 will set us back on a path to normalcy, such as it is in real estate.

Buyers are timidly emerging, so sellers remember to price your home like 2008, not 2006, and all should be well.

I am a Real Estate Broker in Arizona and have been in Real Estate for 14 years. I am also a licensed Broker in the state of California which is where I began my career. I currently practice real estate in Arizona with my wife who is a licensed sales associate also in both states. We specialize in the Greater Phoenix area concentrating on Cave Creek, Carefree, Scottsdale, Phoenix including Desert Hills, Anthem, Paradise Valley, Gilbert, Mesa and Chandler. To learn more about Gary and Shannon and Cave Creek, Arizona and the surrounding communities please visit their website at http://www.garizonaproperties.com or you may email them at skiernanc21@yahoo.com

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