ADDING and REPLACING The Westward Fund Says: Sunbelt States Show Promise for Real Estate Recovery

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Add to headline of release: The Westward Fund Says:

“With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy”

The corrected release reads:

The Westward Fund Says: Sunbelt States Show Promise for Real Estate Recovery

Phoenix seems to be leading the pack

For a long time now, newswires and headlines have screamed, “Foreclosures Soar” and “Millions Lose Their Homes”. Despite the continued doom and gloom, however, the Sunbelt, especially Arizona, is seeing definite signs of promise.

“Although we’re likely to see the economy worsen with more foreclosures, there is inherent and tangible value in today’s market. Some Phoenix area residential properties are already selling at or below replacement costs so these assets won’t take much more of a hit. Real Estate doesn’t go to zero,” states E. Patrick LaVoie with The Westward Fund. LaVoie stated earlier this year that the Sunbelt States, although hit hardest by the recession, were the most likely to recover first.

“Despite the irrational rise in the equity markets, the recession is certainly not over, especially when contemplating the impending credit crisis, 5-year ARM maturities and the commercial catastrophe that is imminent. However, we must not allow the negativity to overshadow the positive facts that exist in specific markets,” continued LaVoie.

“While some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates, new markets like Provo, Utah, and Boise, Idaho, have seen large increases,” states James J. Saccacio, CEO of RealtyTrac. “As unemployment rates increase in different parts of the country, it’s very likely that we’ll see similar patterns develop elsewhere.” In April of 2009, the nation’s adjusted rate of unemployment rose four-tenths of a percent from the preceding month, to 8.9 percent, while unemployment in the Sunbelt State of Arizona remained relatively unchanged at 7.7, consistently below the national average.

“With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” stated NAR’s Chief Economist, Yun. Total home sales for the U.S. decreased 2.9 percent during the first half of 2009. However, the western states incurred the largest cumulative increase of 11.8 percent, with Arizona leading at 41.5%.

In a normal market, housing inventory averages 6 to 7 months. This is the time it takes to sell all the active listings at the current rate of sales. “When the tax credit was enacted in February, inventory was 9.1 months. Because of the spurt in home sales since then due to the tax credit, inventory declined to 8.2 months in August, closer to ‘normal’ than at any time since 2007,” stated an NAR representative. NAR President, McMillan followed up by saying, “With a gradual absorption of inventory, we are on the cusp of a general stabilization in home prices.”

According to the Cromford Report, Phoenix inventory decreased dramatically from a high of nearly 20 months in January 2008 to 11.3 months in February 2009, to slightly above a 4 month supply in July. It was still in the 4 month range on October 16, 2009.

“When buying real estate, consider all the facts and trends specific to your target market, otherwise, the information could be misleading,” advises LaVoie. “Today’s market is not all negative, positive things are happening, especially in the west and certainly in the Phoenix Metropolitan area. We’ve never seen investment opportunities like this before and we may never see them again in our lifetime.”