Many thanks to reader Ron for providing us with his own study on Ridgefield, a neighborhood in South Phoenix. Housingdoom looks a lot at Gilbert, AZ because that’s my backyard, and that makes it easy to track. We appreciate reader’s contributions- you see what’s happening in your neighborhoods better than anyone, and help us paint a better picture of where the market is headed.
Here’s what Ron’s comments and spreadsheet:
I read your site quite often and just thought I would send you a spreadsheet. I just threw it together, no great insights, just more data to support the pullback in prices and the inventory glut.
A friend of mine and I bought a home in the Ridgefield subdivision in South Phoenix a little over two years ago. The development was built in 2003-2004. There are a few new developments in the area aside from this one. We built there because it was so cheap. We bought for $113,000- a brand new 1580 sq ft home with 4 bedrooms. We were able to rent it out for around $1200 a month almost immediately, so its worked out well for us.
Anyway, thats just a quick backround on why I looked at this one subdivision. I have a home there so I keep an eye on the prices. As with everything else around here the values exploded last year, and the same model that I have sold for as high as $245k in late 05. That’s quite an increase from the low 100’s, which was where prices were when we built.
As of now it seems the prices have pulled back at least 10%. The most recent sale of my particular model was in August for $219,000. The question is what happens next..as you mention all the time there is an inventory glut and right now this neighborhood is no exception, currently there are 12 homes for sale. 12 might not sound that high..but there are only 88 homes total, so about 14% of all the homes in the development are for sale right now. Most of them have been for sale for several months, and there is a wide variance in asking prices..from 215k to 240k for my particular model. So although the recent sales suggest only a 10% pullback, it could get much worse if these homes continue to sit for sale for months on end.
On my spreadsheet I have the most recent sales I could find on the AZ republic, and used the assesor’s site to determine the sq footage and the owner’s city/state..I just started noting the owner’s location because I kept seeing California addresses during my search. 13 of the owners on this list have CA addresses listed with the assesor, and I only have recorded 37 purchases, of which 2 are for the same home multiple times. So from my estimates, about 37% (13/35)of the homes sold in the past 12 months (as far back as the republic’s search goes ) were bought buy buyers from California.
Just thought it was interesting to see hard data about the current pullback in prices and also the fact that a large chunk of the buyers would appear to be California investors. There are some anomalies/outliers in prices. A few sales were much cheaper than other sales around the same time frame, and a few other recent higher priced purchases when compared to most of the other sales. I’m not sure how to explain those other then some people got really good deals and some did not. One home, 4909 S 15TH PL, sold for $155k in October 05, and then for $239,900 one month later in November to an unlucky Californian. I thought that was an amazing flip.
Hope you find some of this interesting.