Debbie Perelman | MPES

I have established a wide network of friends and clients both in North Shore Chicago and in the Phoenix/Paradise Valley area of Arizona, where I live and practice full time. Often with a real estate change there is a life change; marriage, divorce, a move to retirement or a new community for a growing family. Whatever the change may be I will make that transaction smooth and the least of your worries.

My real estate practice began in 2006, following a 16 year career as an attorney in Chicago. My legal background and years of experience as a real estate broker has resulted in razor sharp business skills, proven invaluable in helping my clients get the best deal possible, whether buying or selling a home.

DebbiePerelman.com

Associate Broker, JD602.733.2396 Direct

[email protected]

Presented By

Debbie Perelman602.733.2396

[email protected]

A Realtor for All Seasons of Your Life

Statistics gathered from ARMLS. All information deemed reliable but not guaranteed. (Single-Family Residences)

Produced by Desert Lifestyle Publishing • 480.460.0996 • www.DesertLifestyle.netIf your home is currently listed, this is not a solicitation for that listing.

METRO PHOENIX | BY THE NUMBERS2014WHERE 2015

Glendale $199,809 $218,403 Mesa $223,059 $237,050 Phoenix $241,802 $257,167 Peoria $252,982 $265,263 LitchfieldPark $278,460 $272,620 Tempe $264,302 $283,864 Gilbert $282,127 $292,280 Chandler $287,924 $301,463 CaveCreek $461,686 $448,760 Fountain Hills $513,615 $515,543 Scottsdale $631,319 $646,296 Carefree $918,432 $803,037 Paradise Valley $1,607,465 $1,842,561

Arcadia $894,306 98 96% 17 Aviano $642,881 80 97% 21 Biltmore $839,017 91 96% 33 Coronado $237,786 105 98% 7 Desert Ridge $395,124 81 98% 66 Encanto $432,045 116 94% 11 Highland Estates $306,000 48 97% 4 Moon Valley $371,333 70 97% 27 Phoenix Mountain Preserve $1,211,250 132 94% 1 SquawPeak $1,402,875 197 90% 4 Tatum Ranch $345,540 70 98% 109

AVERAGE SALES PRICEBY CITY

BY COMMUNITY

Average Days on List/Sell SalePrice Market Price Ratio ClosedWHERE

MetroPhoenixECONOMIC SNAPSHOT

mid-year 2015

Arizona’s economy continues to grow, but at a slower pace than we typically enjoy. However, this was to be expected. Given how rough this last recession was on our state,

and how weak the subsequent recovery has been, we aren’t in that bad of shape. The key is to not compare the economic statistics to previous expansion periods, but to compare to current

expectations and what constitutes weak, moderate, or strong growth given the many constraints that we (and many other states) will continue to face.

Overall, population growth is picking up a bit, and the employment statistics are improving year after year. The story varies by region though. For the whole of Arizona, the “lost jobs” from the last economic downturn won’t be regained until the spring of next year. For Greater Phoenix, full job recovery will happen by the end of this year, or maybe the beginning of next. For Tucson, full recovery is closer to 2020. Thus, when viewing state economic data, it is important to note the variations by region. Each area has its own opportunities and challenges.

In terms of Greater Phoenix, the numbers are picking up and the region is leading the state. For the first half of the year job growth has been about 3.0%. Expect this to improve modestly through the remainder of this year and increase to around 3.2% for 2016. While this isn’t the 5.0% rate of job growth that we might normally enjoy at this point in an expansion, it certainly is an improvement over where we stood just a couple or three years ago.

So, if population numbers are picking up, albeit slowly, and job numbers are also improving, then what will happen to the real estate market? The answer is: It’s complicated. The economics of

real estate has always been driven by location. Now the dominant factor is eligibility for a mortgage. People have also become comfortable with the apartment lifestyle or renting a single-family home. While socioeconomics related to housing preferences (i.e. single-family versus multifamily) may have changed a bit, it’s the economics that drives demand. If you were recently foreclosed upon, then you may not currently qualify for a mortgage. If you have a large amount of student debt, had a rough recent work history, etc., etc., etc., then buying a house may have to wait.

The good news is that the problems are starting to unwind. Expect gradual improvement in eligibility in each of the next four years. More movement of people and money across the country will also translate into more churn in Arizona and more net new people moving to the state and needing not just real estate product, but also all of the things that go along with new population like furniture, services, the list goes on and on. It is okay to be optimistic about the state and region, as long as those expectations are based on the economic reality that we currently face.

Residential Real EstateBy Michael Orr | Director of Real Estate Studies at ASU & Principal of The Cromford Report

The housing market recovery in Greater Phoenix started in earnest in September 2011 and by the end of 2013 it had taken us all the way back to a normal balanced market. However the recovery

took a long break during 2014, with lower than normal volumes and investors curtailing the frantic bargain-hunting activity that had lasted from 2009 through mid 2013.

February 2015 saw the recovery get its second wind, making significant progress over the last 5 months.

This time the market is being driven by ordinary owner-occupiers while investors and second home buyers take the back seats.

• Foreclosure activity is below normal

• Investor purchases are below normal

• Second home purchases are a little blow normal

Unlike 2014, sellers in 2015 are enjoying a distinct advantage over buyers in negotiations. This is not because of unusually high demand. Demand is healthy but not excessive considering the population size. In fact homes are changing hands much less frequently now than a decade ago. The real reason for the sellers’ advantage is the weakness of the supply. This can be explained by the following factors:

• A large number of homes have been converted to rentals over the last 7 years. Landlords are enjoying low vacancy rates and rising rental prices, so very few of them have sold their properties back into the open market.

• Home builders built far fewer single family homes between 2008 and 2015 than they did in the period 2000 to 2007. Instead, construction has been much more active in multi-family apartment buildings designed for rental occupancy (or conversion to condos at a later date).

• A significant percentage of homeowners with a mortgage (somewhere between 10% and 15%) are still underwater with homes that are worth less than their outstanding mortgage debt. They are not putting these homes on the market because they would have to pay off the excess loans in cash.

During the period November 2013 to January 2015 the quiet market conditions caused a small hiatus in price rises. However the last 5 months has seen some increase in upward price momentum.

As of July 2015 the annual numbers were as follows (compared with July 2014):

• The annual average price per sq. ft. rose by 5% from $125.38 to $131.02

• The annual average sales price increased 5% from $244,827 to $257,175

• The annual median sales price gained 7% from $187,000 to $200,000

These are tame compared with the 2012 and 2013 increases in home prices, but are far in excess of inflation which stayed between -0.2% and 2.0% throughout the last year.

The market has been especially healthy recently when we consider dollar volume rather than unit sales. The total amount spent across Greater Phoenix on single family, condo and mobile homes during the first half of 2015 amounted to $11.3 billion. This is 17% higher than in the first half of 2014 and exceeds the first half of all other years since 1999 except for the bubble years of 2005 and 2006.

High end luxury homes are having another excellent year in 2015, buoyed by a strong stock market and excellent availability of jumbo financing at very attractive terms to well qualified borrowers. Sales of homes priced at $3 million or more are up 40% while dollar volume is up 43% compared to the first half of 2014.

Many families who lost their homes through foreclosure in 2008 are becoming eligible for conventional loans in 2015. A push from FHA to increase the affordability of mortgages to those with good but not great credit is stimulating an increase in demand for FHA loans in 2015 over 2014. Unemployment is declining and job growth improving although this is tempered by relatively slow growth in average earnings. These trends are gradually shifting demand away from renting and towards home ownership. The Millennial generation is also expected to increase its rate of home buying. How fast this trend will emerge is still unclear, but given the size of this generation it could have a significant positive effect on housing demand over the next few years.

The new home market was very subdued in 2014 with sales down 9% from the prior year. However, permit applications increased in March through June to reach levels unseen since 2007. Home builders have been reluctant to build entry level homes in excess of current demand, so with demand improving we are likely to see continued supply problems below $200,000. Most new construction is focused on the move up market between $200,000 and $500,000.

Construction jobs are still well below 2007 levels and a shortage of skilled labor is likely to be felt in the event of any significant increase in construction volume.

The Greater Phoenix housing market is healthier now than at any time since 2005 with a clear advantage for sellers over buyers in most areas.

The highest demand areas tend to be closer to employment opportunities and retail centers while demand

is always weaker in outlying areas. However the recovery wave has now spread fully to the outlying rural areas and there are no longer any pockets with an unhealthy excess inventory. 2015 is likely to see upward price movement well in excess of inflation and higher than we saw during 2014.

GREATER PHOENIX ECONOMIC FORECASTARIZONA ECONOMIC FORECAST

Source: Elliott D. Pollack & Co. forecasts as of July 2015.

Transaction Type (group) Lender Owned Short Sales Normal

ACTIVE LISTING COUNTSGreater Phoenix • ARMLS Residential

SALES PER MONTHGreater Phoenix • ARMLS Residential • Measured Monthly

A Recovery Like No Other

POPULATION1.5% increase in 20151.7% increase in 2016

EMPLOYMENT2.6% increase in 20152.9% increase in 2016

RETAIL SALES7.0% increase in 20156.0% increase in 2016

SINGLE FAMILY PERMITS25.0% increase in 201518.0% increase in 2016

Economic UpdateBy Jim Rounds | Senior Vice President | CEO, Elliott D. Pollack & Co.

“17% higher than the first half of 2014”

“Greater Phoenix housing market is healthier now than at any time since 2005...”