Arizona Real Estate: Past, Present And Future

Elliott Pollack & Company gives a very informative five-page dissertation on the Central Arizona real estate market, looking back at the last several years and looking forward into the future.

Elliott Pollack states that last years frenzied real estate market was a classic example of a supply and demand imbalance, nothing more and nothing less. The supply and demand imbalance was caused by an increased demand for single family homes for owner-occupied purposes, second homes and investor properties.

He suggests that 25% to 30% of the resale market last year was to investors. The result of this imbalance was our skyrocketing housing prices, which had our median new home price jump from $159,700 in 2002 to $240,600 in 2005. In 2005, for the first time in decades, housing prices in greater Phoenix grew more rapidly than in the U.S. While we had over 60,000 new home permits in 2004, and expect to break that mark in 2005, Elliott Pollack sees a current demand for 41,000 to 45,000 single-family new home permits, increasing to 50,000 to 55,000 by the next decade.

He believes that our frenzied market will end slowly as investors and other buyers trickle out of the market as prices and interest rates increase.

He also states our home affordability, which until a few years ago made metro Phoenix one of the most affordable home price markets west of the Mississippi, is now less affordable than Salt Lake City, Denver and Albuquerque. This has caused a big increase in apartment to condo conversions, which Elliott Pollack says some 17,000 units that could go from rental to ownership.

Finally, Elliott Pollack touches on our commercial markets, stating that all have improved and are very healthy.

More information at: ElliottPollack.com

A very good article illustrating where we are at, where we came from and to help us see where we are heading in the future.