Southwest Valley Housing Rebound

David Madrid, The Arizona Republic

While home sales in most of the Southwest Valley have declined when comparing July 2006 numbers with July 2007 sales, there is confidence among real estate and housing experts that the market is correcting itself and rebounding.

"People are looking at the idea that the market will recover in three to five years, and what were once the hot areas will become hot areas again," said Jay Butler, director of Realty Studies at Arizona State University's Morrison School of Management and Agribusiness. "So if you're an investor or whatever, you may move into some of these areas because they offer a sort of attractive play, not over the next year or two but over the next four or five years," Butler said. The sales of new and existing homes and their median price have mostly declined in the Southwest Valley when comparing the July numbers. One place that doesn't hold true is Litchfield Park, where the number of resale homes sold increased and the median price of new and resale homes also climbed. The number of new-home sales there decreased from 20 in July 2006 to 10 in July 2007. Goodyear saw an increase in new home median price of almost 20 percent, mostly due to some high-end developments that are being built. Carl Giordano Sr., of Giordano and Giordano RE/MAX Achievers in Goodyear, said he and his wife and business partner, Phyllis, think the housing market is stabilizing. Both buyers and sellers now have more realistic expectations, he said. "Phyllis and I believe this is a good market," Giordano said. "And what I mean by a good market is everything that needed to be weeded out is being weeded out. We're back to old real estate. You've got FHA. You've got VA, and you've got conventional (loans)." That weeding out of subprime lenders and real estate agents who entered an overpriced 2005 market to make an easy buck is stabilizing the market, he said. "The Southwest Valley is a great place to live, no question about it," Girodano said. "Litchfield Park, Palm Valley, Avondale are doing good. Buckeye is coming along. Goodyear's doing great. The school systems are good. The cities in the Southwest, in my opinion, have great community camaraderie and spirit." Sharon DeMoss, a Realtor with Keller Williams Realty Professional Partners in Goodyear, said there is so much new development in the Southwest Valley that real estate agents are feeling optimistic. At the same time, because of the subprime market meltdown, the market is flooded with home listings, she said. Subprime lenders pushed adjustable-rate mortgages that began with a low interest rate. Once the rate increased, too many people couldn't afford to pay the higher house payments. "Many of them (resale homes) are overpriced," DeMoss said. "We are sitting with our sellers and saying, 'You guys have to be the lowest price in your subdivision for your floor plan.' And many times that doesn't even do it, because many buyers are coming in and saying, 'I don't think the bottom is here yet. If I pay $250,000 for this house, how do I know that in six months I'm not going to be able to get it for $200,000?' " DeMoss said new homes are a great buy now because builders are cutting their prices or offering incentives to buyers. "A couple of years ago, these same builders were making people stand in line to get on a list to get a house," she said. "My personal opinion is that during that 2005 frenzy, many builders went out and bought a whole bunch of land, and now they have no choice but to go ahead and build." In 2005, home values skyrocketed, and many investors were paying more than properties were listed for, she said.