Real Estate Reality: Home shortage

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By Jennifer Thomas By Jennifer Thomas

PHOENIX -- It is no surprise housing prices are going up, up, up here in the Valley, which is news we've all been waiting to hear. But are we preparing ourselves for another housing bubble?

The short answer is: No. Real estate analysts say our recovery is steady, in large part, because right now there are far more buyers than houses available.

From luxury homes in Paradise Valley to entry-level floor plans in Peoria, real estate agent Robert Joffe said across the state, Arizona homes are once again prized property.

“I've been doing this for 28 years, I would say this is the busiest I have ever been,” Joffe said.

A big turnaround from just a few years ago. 

“We have actually really turned to a seller's marketplace," he said. "Some sellers getting multiple offers on properties; it definitely has changed very quickly. “

Joffe said a number of factors are helping Arizona bounce back from a foreclosure freefall.

“I think a combination of people coming back, wanting to live here, low interest rates, and a great living environment has caused Arizona to really prosper," Joffe said.

But, he said the biggest factor driving the latest boom is a real estate squeeze.

“What we are really hurting on is low inventory of available homes,” he said.

Kuldip Verma, of Vemaland, agrees.

“And the inventory from 57,000 homes in 2008 has gone down to 16,000 homes in 2013,“ Verma said.

Vermaland is one of the largest landowners in the Phoenix area and Verma said that housing shortage has home builders on the hunt for land.

“And we anticipate the sales this year in raw land should exceed all the sales during 2008, 2009, 2010, 2011 and 2012,“ he said.

And while more homes could help keep prices affordable, especially for first-time buyers, Verma said there is a cost -- location.

“The most raw land that is available is either in the West Valley or the southeast Valley.”

And he means far west, beyond the White Tanks or far southeast toward Casa Grande, because while it appears there is a lot of open space around the Valley, very little is open to development.

“Surprisingly, Arizona has only 17 percent land which is private,” Verma said. "The rest a checkerboard of state, local and federal lands, along with Native American reservations, so to find large tracts builders are going further out and driving up prices as they do.

“During the distressed time from 2008 to 2012, the land prices tumbled down to as low as 5 cents to 10 cents to the dollar,” Verma continued. “Now in the last three months, we are seeing land prices jump to 10 to 15 cents to the dollar and I feel we should see the firming up of this market by the end of the year.”

Joffe said the good news is that until that new land is developed there are still bargain-priced homes out there, but he said you need a good Realtor to find them. He also said get pre-qualified and be ready to jump when what you want hits the market.

“I think if someone is on the fence they should get off of it because next year they are going to be saying, 'Why didn't I buy this year,'“ Joffe said.