What is Happening With Chandler Home Prices?

It’s funny. I turn on the news one day and they tell me a recent study shows that home prices are stabilizing. The next day I turn on the news and they report about a study that says they are falling and will continue to fall! Well here are my thoughts on the matter…

Why did prices fall so far so fast? I like to blame it on foreclosures resulting in short sales. The banks sell properties below market value either in a traditional real estate transaction or on the courthouse steps in a Trustee’s sale. After the sale, this becomes a comparable property or “comp” for appraisers. So because the banks sold these properties below fair market value, they have driven market value down! It also resulted in much disparity between the amount that homes have been listed for and the price which they sell for. Unfortunately we saw this snowball.

Many banks have stopped foreclosing on properties and even stopped “short selling” properties. This results in the snowball coming to a screeching halt. This can be evidenced in the fact that the list price and actual sale price for Chandler real estate were very similar for the 3^rd quarter of 2010. Take a look:

So what will happen next? There is a chance that prices could start falling again when the banks resume foreclosures and short sales. In fact, many experts say that this is what will happen. Well I too am an expert, and I don’t agree with that prognosis! Looking at the same chart, I see that prices pretty much leveled of before the banks put the skids on their foreclosures. In fact, I look at the Maricopa and Queen Creek real estate market trends and I see that the tide has already turned in the outlying communities. That’s where prices fell first, and that’s where I think we will see (or should I say we are seeing?) the first signs of recovery. It is my opinion that home prices in Chandler have stabilized.