Amid Phoenix foreclosures, one suburb's home values rise
Even better are the signs emerging from Sun Lakes, Ariz.
The golfing community of some 13,000 sports five(!) country clubs, nice homes, and a growing cohort of retirees. It's seen an uptick in homes prices, which would be no big deal, except that Sun Lakes is part of metro Phoenix.
That's right. The region so wracked by distressed real estate that it should be renamed Foreclosure Foenix (or Phoreclosure Phoenix) has a suburb where home values are going up.
That's encouraging. If a community can see residential values rise in a metro area like that, then it suggests that in some places around the United States local market dynamics are starting once again to trump national trends. These relatively robust markets can lead the US out of its housing bust.
"It's almost a demographic difference," says Sean McSweeney, director of product management at Clear Capital, a real estate valuation firm in Truckee, Calif. As the slump eases, "those differences are really coming to light."
During the housing boom, investors in much of the Phoenix area flipped homes. Prices doubled in four years, then crashed. Home values are down 41 percent in the past 12 months alone, according to Clear Capital, which published its third monthly home-data index Thursday. More than 60 percent of the metro area's home sales last quarter were foreclosure-related.
By contrast, people came to Sun Lakes to retire, not dabble in real estate. Prices fell less in the crash – down 15 percent in the past year. Foreclosures made up only 18 percent of sales, nearly half the national rate of 33 percent, according to Clear Capital.
Now, home prices are up 1.2 percent in the second quarter (and most of July), compared with the first quarter.
Some cities, like Cleveland, have fallen so far they can't go anywhere but up. Clear Capital estimates the typical lower priced home in Cleveland fell from $85,000 in 2005 to $20,500 last winter and has now rebounded to $30,000.
Sun Lakes, too, is seeing sales and prices rise the most among its lowest priced homes (under $180,000). But the bounce is coming after a much smaller drop than Cleveland's, an encouraging sign of gathering strength.
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