Luxury Housing Market Update

MIKE ORRmike@cromfordreport.com

mike.orr@asu.edu

© 2013 www.cromfordreport.com

Feb 20, 2013

Delinquency Rates Down80% of the way back to normal

AZ

USA

ranked 5th worst

ranked 40th

7.3%

10.6%

13.5%

16.3%

Normal level is 5%

© 2013 www.cromfordreport.com

Shadow Inventory?

• “We don’t know what the banks are hiding”

Lender Owned Homes / Condos

City ZIP Homes Unlisted REOs

ActiveREOs

REOs in Escrow

% Unlisted REOs

Phoenix 85018 13,231 12 4 8 0.09%

Paradise Valley 85253 6,563 5 1 4 0.08%

Scottsdale 85255 18,331 12 6 3 0.07%

Scottsdale 85258 6,394 2 0 0 0.03%

Scottsdale 85262 7,022 10 9 2 0.14%

Scottsdale 85266 5,843 3 1 1 0.05%

Supply

excludes active listings under contract seeking backup offers

2,9122,894

3,596

Sales

Prices

30 DayOutlook

Outlook for the Luxury Market

• Continued recovery and prices will gradually rise

• Pending foreclosures will soon fall to normal levels

• Short sales will be much less significant

• Increasing confidence in the market

• Improving credit -> more move up buyers

• Builders will slowly return to luxury market

• Luxury market will improve from the bottom up