Home sales, residential development picking up

One local Realtor likened the Yuma real estate market to “a two-year party and a seven-year hangover,” a hangover that is finally starting to let up.

Realtors report that increased sales and homebuilders, spurred by low inventory of available houses, are picking up the pace of new construction.

However, there's still some pain ahead with a number of short sales and foreclosures yet to come that are keeping housing prices depressed.

Dan Fauth, president of Chicago Title Agency in Yuma, predicted it will take six to nine months to get through the inventory of short sales and foreclosures now on the market and perhaps another six to nine months after that to work through delinquencies that become more foreclosures.

At least, he said, the percent of short sales and foreclosures in relation to regular sales is declining. “You can just barely see a light at the end of the tunnel, but it's there.”

In the meantime, Realtors report being busy selling homes as people, perhaps feeling a little more confident, are taking advantage of historically low mortgage rates and housing prices that are “still wonderful.”

“First-time homebuyers are so excited,” said Fauth. “I don't know if they realize the awesome deals they're getting with low prices and low interest for payments that are less than rent.”

As for financing, Jenny Santana of Guild Mortgage Co. said it's still hard to get, “but loans are being made.”

Fauth agreed. “People can still qualify for mortgage loans, it's just a more tedious, long, drawn-out and frustrating process. Underwriters are requiring more detail. They're under the gun to not get those loans back.”

As of Wednesday, there were 830 active listings on the Yuma Association of Realtors multiple listing service, reported Realtor Carol Engler. That includes condos and mobile homes as well as single-family houses.

This is an average of 30 percent fewer listings than the same time last year and the lowest inventory since the “crazy time,” Engler said. “I've been saying all along that Yuma's real estate market was in the recovery mode. We did not get hit as hard as Phoenix and Las Vegas markets because we did not overbuild. We never had entire subdivisions sit vacant, and this is proving out by the lack of current inventory and multiple offers on some properties.”

Fauth also believes Yuma suffered less because “more people here are making an effort to keep their homes. In my experience, the Hispanic population has the lowest rate of defaults of any buyers, by far.”

Michael Hall, broker for ERA Matt Fischer Realtor, also is convinced that the market is recovering.

“The market has been extremely good since the first of the year. We've already sold more houses this year than in all of 2011.”

Furthermore, Hall noted, prices seem to have stopped their slide and may even be improving. That's true especially for the low- and moderate-priced homes.

Realtor Carolyn McKelvey Malouff remains concerned about the number of repossessed homes on the market, but she agrees that things are getting better. “People are starting to buy and sell homes.”

The second-quarter real estate report by the Yuma County Assessor's Office confirms that sales activity has picked up, although pricing continues to vary.

There were 615 sales of single-family homes during the second quarter through June, by far the most sales in a quarter since late 2006.

The average sales prices for the most recent quarter was $133,211, according to the assessor's report. That's slightly up from the two previous quarters, but otherwise the lowest since the fourth quarter of 2003.

Those numbers don't tell the whole story, though.

Engler said she's actually seeing prices “inch up a lot,” noting that some of the same 1,895-square-foot houses in Barkley Estates that were selling for $155,000 last year are now under contract in the $180,000 price range.

With all the buying activity and low inventory, builders are turning their attention back to subdivisions that had been on the back burner for a while.

“The numbers are looking good,” Randy Crist, city of Yuma building official, said of permits issued so far for residential construction. Through August, the city has issued 134 permits for single-family homes this year, 10 more than in all of 2011.

“It's not the 1,000 housing permits issued in the bubble and it's not back to normal. But we're not at the bottom we were.”

Crist noted that the first four units in Sunset Mountain Villas, a townhome project at Avenue 9E and North Frontage Road, have already sold. The stalled project was recently taken over by a Halls Brothers entity with an aggressive schedule of selling and developing the 200 remaining lots.

On other fronts, the builder is moving forward again with Park West, a subdivision that had been idle for three years. The builder also is busy with two other subdivisions, Ocotillo and Saguaro, and is anxious to start on Desert Oasis, a new subdivision south of 32nd Street on Avenue 7E.

“It's exciting to get the building crews ramped up and getting the economy moving,” Hall said.

Activity has been brisk as well for Elliott Homes, with closed sales up 29 percent from last year, said Bobbie Cooper, real estate agent for the homebuilder.

In Scottsdale East Estates in the Foothills area, 26 homes sites are in various stages of construction, she said. Of those, 15 have been sold while the remaining 11 will most likely be sold before construction is completed even though prices have increased in increments. For example, starting price in January was $161,950 for a home plan that now sells for $186,950.

“Rarely do we have unsold finished inventory available,” Cooper said, noting that warranted price increases will continue with product demand and labor shortages.

“New home sales will always be unique in the market, as a new home is only new once!”