The Arizona Republic tells MHProNews that the number of houses in the Phoenix East Valley area under contract to sell started to surge in early February, according to a special report from Arizona State University’s W.P. Carey School of Business. The East Valley is a growing area of the Greater Phoenix area that encompasses the communities of Mesa, Chandler, Tempe, Gilbert, Scottsdale, Queen Creek, Apachie Junction, and San Tan Valley

Home sales across metro Phoenix are also on track to jump more than 30 percent during the next few months, potentially signaling the restart of the area’s stalled housing recovery, according to a new report released Friday. It is felt that more Millennials and boomerang buyers appear to be hopping off the fence and stepping into their own houses.

The biggest increases in pending sales were for houses priced from $150,000 to $250,000 and from $250,000 to $400,000. That could signal more first-time buyers and that former homeowners who lost houses to foreclosure are purchasing again.

“It’s really encouraging for the housing market to see home sales climb the most at the lower end of the market,” said Mike Orr, director of the Center for Real Estate Theory and Practice at W.P. Carey. “Millennials and boomerang buyers are likely behind much of the increase in sales.”

Real-estate agent Matthew Coates of Chandler-based West USA Realty said he has sold four Valley houses in the past 10 days. He said he is now working with three buyers, including a first-timer.

Less-stringent lending standards and the federally mandated cut to Federal Housing Administration (FHA) mortgage insurance may be attracting new buyers, especially Millennials, experts said.

An FHA loan appeals to Jacqueline Moore, a 30-year-old single mom who is ready to buy her first house. She’s looking in central Phoenix because it’s near her office in the Biltmore area.

“Renting is so convenient but definitely expensive,” said Moore, who currently lives with her son, Noah, in a downtown Phoenix high-rise. “I am ready to invest my money in a house, but I want something with low maintenance.”

She said she is considering an FHA mortgage because of the low down payment required – 3-1/2% or less. She also appreciates the recent cut to the mortgage insurance required on the loans.

Valley home sales fell 14 percent last year. Housing-market watchers have said since the market started slowing in early 2014 that it would take less-stringent lending requirements and more Millennials and boomerang buyers to push home sales back up.

The trend appears to be national, as pending home sales in the U.S. reached an 18-month high in January, according to the National Association of Realtors.

“Millennials have realized interest rates are going to go up, and that’s scaring them into buying,” said HomeSmart real-estate agent Mike D’Elena, who is working with Moore to find a home. “Based on the increased demand from buyers I am seeing, the Valley could have a seller’s market by summer.” 

However, he isn’t seeing the same increased demand from boomerang buyers in the Valley yet.  Most potential boomerang buyers, people who went through foreclosures or short sales during the crash, have been required by lenders to wait seven years before they can qualify for a loan again. Many people who lost houses in 2008 are eligible to buy again this year.

The rising demand from younger buyers also appears to be helping Phoenix’s new-home market. During the past two months, contracts to buy new houses in the region have climbed 12 percent, according to Belfiore Real Estate Consulting.

“Consumers, relegated to window shopping for a new home as the economy has recovered over the last 24 months, are just starting to show their purchasing might,” Arizona real-estate analyst Jim Belfiore said.

Contracts signed to purchase a house usually become sales within six to eight weeks, so Phoenix-area home sales should begin to jump in March.

Orr saw the spike in home-sale contracts through his regular research of Arizona Regional Multiple Listing Service data. Pending home sales, or contracts, aren’t public record until they close and are recorded.

He said it will take a few months for higher home sales to translate into rising prices. “There is no doubt we will see home-price increases coming in the next several months,” Coates said. ##

(Photo Credit: Gibson Sotheby)

 

Article submitted by Sandra Lane to – Daily Business News – MHProNews.