About a week ago, Federal Reserve Chairman Ben Bernanke said that the housing market “has shown some signs of bottoming” after three consecutive years of declining. 

 “Although some of the boost to sales in the market for existing homes is likely coming from foreclosure-related transactions,(Phoenix bank owned homes and short sales) the increased affordability of homes appears to be contributing more broadly to the steadying in the demand for housing,” he said. This was welcome news to the real estate markets, as new home sales show a substantial uprise as well.

Chairman Bernanke noted the average rate for a 30-year fixed-rate mortgage has fallen nearly 1 ¾ %  since August, and falling Lender owned and distressed property inventories is setting up for a recovery in the Phoenix Real  Estate market and the national market as well. 

In addition, the Fed chairman said the economy should bottom out very soon and “turn up later this year,” assuming that gradual repair of the financial system continues.

Chairman Bernanke noted that the U.S. economy has “contracted sharply” over the past half year, and that he sees “further sizable job losses” and a rising unemployment rate in the coming months.

However, he also stated that the U.S. economy could return to growth later this year, provided that improvements in the financial markets continue.
He noted that, “In coming months, households’ spending power will be boosted by the fiscal stimulus program, and we have seen some improvement in consumer sentiment.”
 “Even after a recovery gets under way, the rate of growth of real economic activity is likely to remain below its longer-run potential for a while, implying that the current slack in resource utilization will increase further,” he said. “We expect that the recovery will only gradually gain momentum and that economic slack will diminish slowly.”

This was certainly an encouraging statement from one of the most powerful monetary policy figures in the world. Whether we are seeing a bottom or not is still a question to be answered. However, hard economic evidence shows an increase in home sales, coupled with low interest rates, which has only helped the Phoenix housing market. We will see in the coming months if we can continue to sustain momentum and finally gain traction in the real estate market. Phoenix investors, do not wait until the real estate market makes a complete recovery. Now is the time to purchase positive cash-flow producing Arizona income property and wait for appreciation. Homes located in central Phoenix are selling for below market prices (upwards of 30 to 50% below market) will not last. Slowly but surely, bank owned inventory is being absorbed quickly by investors, and once they diminish, its inevitable that all these homes will slowly begin to regain their value. Contact RealVision Group today and begin structuring your Phoenix Investment Property portfolio with expert advice and guidance.

Angel Karchev

RealVision Group – “where success is by design”

602-762-3636

602-686-0456