Paradise Valley Weekly 273rd Edition - July 25, 2015
Last week's newsletter mentioned that I've seen multiple offer situations recently in Paradise Valley, despite the heat. This article in the Wall Street Journal confirms it's a common situation, from Boston to Seattle and many cities in between.
There is a big difference between this run up in the real estate market and the one 10 years ago...
10 years ago, prices were driven up by insane lending practices. I once met a Starbucks barista who informed me she just closed on her third house -- for $750,000! Everyone and anyone could get a "liars loan" with no documentation of income or assets. This created massive artificial demand.
Now, however, we're suffering from the fallout of the last crisis. The US hasn't been building homes at anything close to a normal, sustainable rate for many years. However, we've still been growing. More people means more demand, and supply just hasn't kept up.
Simply put, we stretched the rubber band, and it's snapping back. If interest rates increase, it will certainly have a negative effect on purchasing power. However, the amount of leverage, and the quality of loans are night and day from 10 years ago.
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| Closings There was $5.9 million in volume at the very low price of $257 per square foot. The mix of homes was older, as the price per square foot would imply.
However, the stats don't reflect this age, so no point in reporting the age of construction. One game that some folks have been playing is to list the remodel date as the age of construction. Even if a home is extensively remodeled, it's not the same as starting over from scratch. In any event, with the small number of closings this week, one or two data points can throw off the statistics. Listings
Just 4 new listings this week, no "must sees" but there are some with potential.
To see all of this week's new listings please click here.
To see everything on the MLS in Paradise Valley please click here.
That's all for this week, I'll be back next week with all the latest in Paradise Valley real estate.
Thank you,
Alex Goldstein(480) 442-7325
(c) 2015 Alex Goldstein PLLC
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