Yesterday my newest client met me in my office to discuss her desire to purchase her very first home. She’s a brand new school teacher, and will be working near San Tan Heights in Queen Creek as an 8th grade science teacher next fall. She’d like to move in during the month of June, so she has some time to deal with any house issues before school starts. She’s as motivated a buyer as I’ve worked with in some time, and honestly, it was very refreshing to meet her and feel her energy and excitement during this initial meeting.

Looking in MLS, I searched for any 4 bedroom home, 2 story, that was for sale in Queen Creek for under $125,000. I advised her, that given her timeline, we’d want to avoid any short sale listing, as it was unlikely we could get her moved in before the end of June. This first search resulted in 36 homes for sale, matching that basic criteria, but ignoring the exclusion of bank owned or lender approval necessary. That was a welcome find, so I dug in to find which of the 36 homes were owner occupied, non-short sale, which would allow us the easiest negotiation.

In an ideal world, finding a non-short sale, non bank owned listing would be easy to do. You’d enter the appropriate search criteria, since our MLS includes fields for “lender owned property” and “lender/creditor approval necessary”. Naturally, at least 1/2 of the 36 homes were incorrectly entered, eliminating any hope of an automated search. One home was even noted as a 2 story home, when in fact it was a 1 story ranch.

So we muddled through the 36 homes looking for the hidden gem (or preferably gems), that was owner occupied, in good condition, and not a short sale. We found: NONE. Digging a bit deeper at just a few of the listings the reason there were no owner occupied homes at this price point became abundantly clear. Nearly every home being offered in this price range was originally purchased just a couple of years ago for more than double the current list price. Purchase prices of $250k and up were not uncommon. And then add to that further improvements like pools, landscaping, window coverings, etc., and true cost was even higher.

The majority of my business is in North Phoenix and North Scottsdale, and while I knew that Queen Creek was getting hit hard, finding greater than 50% valuation declines stunned me. It also explains why there aren’t any owner occupied homes for sale in this price range. How many owners would have the equity position to compete with these bank owned or short sale properties? A very, very limited number.

An agent that works in Queen Creek asked on Trulia Voices a while back, when other professionals think Queen Creek will bounce back? I replied 5 years from now. Looking back, I very much underestimated that. If the bottom of the market were today (which I don’t believe it is), and Queen Creek began appreciating at 5% annually (approximately the Phoenix average over the last 30 years) for the next 5 years, only 34% of the loss would be recovered. At a 5% growth rate, it will take until sometime in 2022 for those $250K sales prices to return. If the growth rate were accelerated to 6%, it will still take until 2020, before those $250K sales prices return. And again, those dates assume the bottom of the market is today and that Queen Creek performs equally well to greater Phoenix, which are two assumptions I’m not ready to assert.

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