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The Luxury Distressed Market: Tough Times Ahead

The Luxury Distressed Market: Tough Times Ahead. Beth Jo Zeitzer President/Broker R.O.I. Properties. SLHT Distressed Property Symposium April 16th, 2009. Page 1. Foreclosures – Buyers Respond To Low Prices.

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The Luxury Distressed Market: Tough Times Ahead

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  1. The Luxury Distressed Market: Tough Times Ahead Beth Jo Zeitzer President/Broker R.O.I. Properties SLHT Distressed Property Symposium April 16th, 2009 Page 1

  2. Foreclosures – Buyers Respond To Low Prices The monthly median sales price (across all areas and types) is at the lowest level of the millennium. At $118,900, it is lower than the previous low point of $125,900 reached on January 16, 2001. It has now fallen 56% from the peak level of $267,000 reached on June 16, 2006. As a Result … Buyers are back in the market for smokin’ deals. Investors and first time buyers account for the increase. Purchases are focused where pricing is lowest – including the west valley and the outer suburbs Medium-priced areas like Mesa, Gilbert, Chandler and Peoria are also seeing an increase The move up and top end of the market is not yet participating in the increased buying activity Source: The Cromford Report Page 2

  3. General Market Snapshot Source: The Cromford Report February 26th, 2009 Page 3

  4. REO Market Snapshot Source: The Cromford Report Page 4

  5. $1M-$1.5M Market Snapshot Source: The Cromford Report Page 5

  6. Lender Owned Sales Source: The Cromford Report Page 6

  7. Days Inventory By Price Range Source: The Cromford Report Page 7

  8. Sales Per Month March, 2002: 5,727 March, 2003: 6,471 March, 2004: 8,677 March, 2005: 9,957 March, 2006: 7,495 March, 2007: 5,900 March, 2008: 4,257 March, 2009: 7,594 Source: The Cromford Report Page 8

  9. Investors Are Back Source: The Cromford Report Data based on the “intended use” filed with the county recorder Page 9

  10. Spotlight on: Paradise Valley Plenty of PV homes for sale, but sales are sluggish. Prognosis – more For Sale signs ahead. Active Listings: 581 Pending Listings: 21 Properties Sold Last Month: 9 REOs & Short Sales Sold Last Month: 0 Days On Market – Monthly Sales: 355 Active Listings $/SF: $508.20 Monthly Sales $/SF: $314.85 Median Price – Monthly Sales $1,025,000 Appreciation – Monthly Median: -41.4% Current NOTS: 42 Active REOS: 9 Active Pre-Foreclosures: 34 Current Pending Distressed Properties (Lender Owned, Short Sale, Pre-Foreclosure): 11 Closed Distressed Sales, Last 6 Months (Lender Owned, Short Sale, Pre-Foreclosure): 19 Of These, Sales Over $1M: 3 of 19 Sources: The Cromford Report, ARMLS Page 10

  11. Active Listings - PV Source: The Cromford Report Page 11

  12. Monthly Sales Trends - PV Source: The Cromford Report Page 12

  13. The Distressed Luxury Market While the low end of the distressed market is trading at high volume, the luxury market remains stagnant Pricing in the luxury market remains unrealistic especially when compared to banks’ pricing NOTS are steadily increasing in all luxury markets Continued economic uncertainty makes it difficult for luxury buyers to commit Lending standards remain tight, and only those with the best credit may qualify Page 13

  14. Thank You! Page 14

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