A recession-plagued home market in Phoenix has bottomed out and is on the rebound, say metro Realtors who give northern buyers some credit for helping turn things around.
Over the past year, discount home prices in sunny Arizona have been attractive to northerners, including many Minot-area residents.
"The traffic here is steady as far as people coming down from North Dakota. They are buying a lot of homes," said Realtor Rocky Parra of Gilbert, Ariz., whose wife is a Minot native.
Submitted Photo • This home is one of many houses that have been for sale in the Phoenix-area market, which has seen demand increase and prices rise.
Dan Clementich and his neighbor both had considered retirement homes in Arizona someday. That someday came sooner than they expected when the flood of 2011 forced them from their Minot homes. They went together to purchase a modular home and place it on property so they have a place to live in Minot, but they also traveled to the Phoenix area last December and purchased homes in the area.
Clementich said his five-bedroom house with a swimming pool in a gated community in Queen Creek is far more house than he could have purchased for the price in Minot.
"It's a beautiful house," he said. "Just to buy a house down there for that price, to me, is kind of astounding."
Flight passenger numbers to Phoenix on the rise
Home sales aren't the only thing picking up in the Phoenix area. Flights carrying North Dakotans and other northerners back and forth also are on the rise.
Phoenix-area Realtor Rocky Parra said many home sales are occurring within 15 minutes of the Phoenix-Mesa Gateway Airport, where Allegiant lands with its North Dakota passengers. The airport is booming, as is the whole area around the airport. A five-star resort is being built.
From November through April, Allegiant saw a 50 percent increase in the number of seats flown from North Dakota, said Brian Davis Allegiant communications director.
"Throughout our system, that's out-pacing our average," he said. Allegiant flies out of Bismarck, Minot, Grand Forks and Fargo.
Davis added that Allegiant micromanages its air service more than any other airline, adjusting its schedule to respond to demand changes. That enables Allegiant to readily add additional flights when needed and show the kind of growth trend that it is seeing in North Dakota, he said.
In the planning for the management of its flights into 2013, Allegiant is looking at demand in North Dakota to remain strong, Davis said.
He bought his house for about 35 percent of the appraisal price when it was built in 2006. His neighbor bought a home several miles away in another gated community.
Since December, with improving markets in Arizona, his house on the market today would be worth about 27 percent more than when he bought it, he said. Since September or October, the market for sellers has been improving.
"What's really stimulated the market is just the simple fact that we have gone from having over 50,000 properties in our Multiple Listing Service to 10,000," Realtor Larry Camp of United Brokers Group, said this spring. "Anything under $300,000 or $250,000 is just really, really slim picking right now. The actual inventory is so depleted that every single property that's priced fairly receives multiple offers."
What has happened is that snowbirds who were renting have decided to buy, he said. Also, investors have bought up foreclosed homes to rent them to people who have lost their homes, and others looking for vacation homes or future retirement homes got in the market. All those sales gradually dwindled the inventory, while at the same time, house building virtually ground to a halt.
After four years of market downturn, things are picking up both in sales of existing homes and new homes, said Parra, who is an independent contractor with HomeSmart International. The construction industry is reviving, and as developers get houses built and sold, they are gradually increasing their sale prices on additional construction, he said.
The median home sale price in May was $160,000, up 28 percent from a year earlier, according to the Arizona Regional Multiple Listing Services. Early June sale results showed median sale price per square foot up 5 percent from May, which had been the ninth consecutive month of price increases.
Eighty percent of sales were traditional rather than bank-owned, which also is a sign of reversal, Parra said. The average price on traditional sales, excluding short sales or lender sales, in May was $208,000.
As an example of what's happening, Parra said, one Minot buyer who received a $5,000 bonus for paying cash learned 30 days later that the seller no longer was offering the bonus and had increased the price of additional homes coming on the market by $2,000.
Camp added that Phoenix-area homeowners are becoming more inclined to put their homes on the market now that prices are on the upswing. That could help the market to eventually stabilize, he said.
Parra was still considering it a good time to buy in the Phoenix area this spring. For those clients who are selling houses in Minot or other oil-boom towns at record high prices and replacing those houses with homes in Phoenix, there's a definite trade advantage, he said.
Many of his clients aren't making full-time moves, though. Parra said he is seeing buyers in their 40s or 50s who aren't yet ready to retire but are planning for the future. Or they see the opportunity for their families to make use of a vacation home in Arizona in the meantime.
Management companies are readily available to help absentee homeowners with their properties.
Clementich hopes to vacation in his Arizona home at least four times a year. For now, the house is basically unfurnished, but he hired one neighbor to care for his yard and pool. He has two other neighbors keeping on eye on things for him when he's gone. Whether he ultimately retires in Queen Creek is uncertain, but he feels he at least has that option open.
"It's like Minot used to be," he said of Queen Creek. "We love Minot. It's still my hometown, but it is so chaotic. It's changed so much."
The difference in job market and income potential between Minot and Arizona is what keeps him in North Dakota for now. Clementich, 50, said the job market is improving down south, and even now there's opportunity for extra retirement income for someone who is ready to make the leap.
Ron and Carol Boen had owned a vacation house in Arizona for three years and decided last fall to buy a different house and establish permanent residency. Their 35-year-old house in Minot sold for twice what he paid for his 10-year-old house in Surprise, Ron Boen said.
His Arizona vacation house also was in demand.
"When I put the house up for sale," Boen said, "I didn't even advertise it down here. I just ran it in all the papers in North Dakota."
Those ads netted about 200 responses and an eventual sale to Bottineau residents.
Boen said North Dakotans are buying homes because they are affordable and taxes inexpensive. He also sees some Minot residents fleeing from last summer's flood disaster.
"I hope it's only temporary because I honestly believe in five years Minot will be in many ways a better city than it was. It will never be what it was in terms of a quaint little town but I think it will be a better place," he said. "In the meantime, there's a lot more people like me taking a break from Minot for a while."