Chandler Real Estate Market Showing Signs of Possible Recovery From Industry Malaise

Chandler Real Estate Market Showing Signs of Possible Recovery From Industry Malaise

The City of Chandler in Arizona has fared better than most other Phoenix area housing markets and could be showing signs of recovery from the market malaise that has plagued the Phoenix area for over three years.

Like the rest of the Phoenix housing market, Chandler has seen its share of challenges with the downturn in the market in Arizona. Most recently, the City of Chandler instituted a hiring freeze across city government and laid out the possibility for future layoffs.

But Chandler real estate is a bright spot in the Phoenix housing market and looks like it is weathering the downturn better than other local housing sub-markets. Indeed, there are indicators that suggest that Chandler may have seen the bottom of the market and that 2009 could be a stronger year for Chandler in terms of residential real estate.

Taking a look at current market statistics provides evidence of possible developing trends in the Chandler real estate market.

Inventory Showing Improvement

Available inventory hit a low of 1,765 homes in October, the lowest point since April 2006. In addition, the number of months of inventory has consistently trended lower than 2007 supply levels. In fact, Chandler's inventory supply dropped to a low of 5.6 months supply in July before moving upward again. The onset of the slower holiday season does impact these figures. Nonetheless, both of these figures show a market for the latter half of 2008 that has seemingly broken away from 2007 trends.

Buyer Activity is Stronger

In terms of "Pending" or homes under contract for purchase, Chandler has experienced stronger overall results since mid-2008. In October, Chandler had 291 homes under contract for purchase vs. 233 the same period a year ago, a 25% year over year improvement. Indeed, since mid-year, Chandler's pending properties closely parallel activity seen in 2006 and consistently outperform 2007. Based on this, the Chandler real estate market looks to be positioning for a stronger 2009 if buyer activity follows traditional seasonal patterns.

Foreclosures are Having an Impact

In terms of the percentage of foreclosed homes and their impact on the Chandler housing market, foreclosures are driving a significant part of the Chandler real estate market. Foreclosures (Real Estate Owned or "REO" properties) have grown in 2008 from approximately 7.7% of sales in January to approximately 25% of sales in October. Though this curve is distressing given the implications of so many foreclosures, a newer, more positive trend may be developing.

When looking at available homes, cursory data suggests that the number of foreclosures coming added into the market in Chandler may have peaked in October. Though still early, if this trend develops, a steady decline in new foreclosures could mean that Chandler is working through its tough market climate and on the path to recovery.

Sales Steady in 2008

Final closed sales give the most accurate historical picture of the strength of a real estate market. In this case, Chandler held steady. Estimates show that Chandler home sales figures for 2008 are roughly equivalent to 2007 figures.

Chandler Better Positioned for 2009

Overall, Chandler real estate appears to be better positioned moving into 2009. A healthy buyer demand curve in the early months of the year could point to a stronger 2009 and signal that the bottom has passed. National economic issues could impact developments in the Phoenix real estate market and specifically Chandler but to what extent is difficult to know. Foreclosures are expected to continue for some time.

It is likely that the real estate market will lead the nation out of its current recession. If this is the case, then Chandler may be one real estate market showing signs of doing just that. As such, Chandler is clearly a place to watch in the Phoenix real estate market for the immediate future.