Gilbert, Arizona may be moving past the bottom of the housing market and recovering from the real estate downturn that has plagued the Phoenix real estate market for over three years.
Like the rest of the Phoenix housing market, Gilbert real estate has seen its share of challenges- high home inventory, slowed demand, the onset of foreclosure-related properties, and lower home values. But, Gilbert real estate is a brighter spot across the Phoenix housing market. Indeed, indicators suggest that Gilbert may have seen the bottom in its housing market and that 2009 could be a stronger year for Gilbert in terms of residential real estate.
Looking at inventory, pending sales, foreclosures, and closed sales data
yield more insights for the Gilbert real estate market.
Gilbert Homes Inventory May Be Declining
Gilbert homes' available inventory hit a low of 2,091 homes in September, the lowest point since February 2007. In terms of days on market or market time, Gilbert’s long-term graph points to a peak in April 2008 with a steady decline in days on market since that time. As well, the number of months of inventory, which peaked at 16.8 months in February 2008, steadily declined to a low of 5.7 months in September before rising again. The slower holiday season does impact these results. Overall, there are encouraging signs here that suggest that the worst is over for Gilbert in terms of inventory trends.
Stronger Buyer Demand
In respect to homes under contract for purchase or “Pending” or homes under contract for purchase, Gilbert has consistently outperformed 2006 and 2007 since April of this year when the curve seemingly “broke out.” In December, Gilbert had 311 homes currently under contract vs. 220 a year ago, a 40% improvement. Based on this data, the Gilbert real estate market looks well positioned to come out stronger in 2009 if buyer activity stays consistent with traditional Spring-time patterns.
Foreclosures are Having an Impact
Foreclosures and short sales to a lesser degree, are simply driving prices down which in turn is creating greater buyer interest in the market. Foreclosures (Real Estate Owned or “REO” properties) grew in 2008 to approximately 25% of sales in September from 8% of sales in January. Foreclosures appear to have peaked in August at a high of 30% of closed sales in 2008. Foreclosures will continue to impact the market and put additional pricing pressure on home sellers. However, as prices are forced down, buyer demand will inevitably increase.
Sales Steady in 2008
Final closed sales give the most accurate historical picture of the strength of a real estate market. In this case, Gilbert edged out 2007 by approximately 9%. Gilbert home sales are estimated at 3,450 for 2008 compared to 3,158 for 2007.
Gilbert Looks Stronger Moving Into 2009
Overall, Gilbert real estate appears to be in a stronger position moving into 2009. Based on the indicators mentioned above, Gilbert may have experienced the bottom in the market and be slowly working on a recovery. Broader economic concerns and employment layoffs could impact developments in the Phoenix real estate market and in Gilbert but to what degree is hard to say.
If as many believe, the real estate market is what will lead the United States out of its current recession, then Gilbert may be showing initial signs of doing just that but at a micro-market level.
About the Author
David Lorti is a professional Realtor for RE/MAX Elite in the Phoenix real estate market. He holds a MBA and Certified Negotiation Expert designation and his insights have been quoted in numerous news outlets. His website, LortiHomesArizona.com, and blog, LortiHomesBlog.com, offer additional market insights on Phoenix Arizona homes.
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Article Added on Sunday, December 28, 2008
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