Look around and you'll see evidence pointing to a change in the residential real estate environment. Specifically, home prices have fallen so far, so fast ... and sellers have gotten so desperate ... that sales volumes are beginning to pick up in Phoenix market.

Aggressively priced foreclosures, short sales, and regular homes are now finding buyers, both first-timers and investors. The outsized price declines have helped restore some semblance of normalcy to several ratios (price-to-rent, affordability, price-to-income, etc.).

This is a huge shift from the situation a few years ago, when all of these indicators were ridiculously out of whack!  The sharpest declines in residential real estate are, for now, mostly behind us. I expect to see sales volumes gradually stabilize over the coming year, with total inventory for sale (new plus used) gradually coming down. By mid-to-late 2009, we should see pricing stabilize and gradually turn higher, with the improvement coming in stages depending on location in Phoenix.

There's still tons of inventory on the market to choose from, and you don't need to rush things. So keep these three tips in mind:

http://www.ybuyphoenixrealestate.com/44704-Phoenix-AZ-Affordable-Listings.aspx

Meanwhile, if you're fed up with renting and waiting anxiously to buy a home, shop around. You may find some compelling values that are just too good to pass up. I'm talking about houses or condos you can buy for 50 percent or 60 percent off peak levels.

On www.forbes.com there is an article by Matt Woolsey dated April 17 asking "How Low Will Real Estate Go?". This article was prominently featured on www.yahoo.com yesterday.

Phoenix is shown at number 6 in their list of major American cities where prices have a long way to go down. But there is a huge flaw in the logic. Here's what the article claims:

Phoenix-Mesa-Scottsdale metro area

Price correction necessary 27%

Median income $38,360

Median home price $155,900

Unemployment rate: 6.9%

Projected bottom: June 2010

Matt is using an out of date figure for the median home price. The median home price quoted ($155,900) was correct in mid November 2008. And if prices have to fall 27% from this level they need to fall to about $114,000. However the current median for the Phoenix-Mesa-Scottsdaler metro area is $116,500. So median sales prices have already fallen by 25% in the period between mid November 2008 and mid April 2009.

Prices have only about 2% to fall to reach the Forbes target, not 27%. Hence, the forecast that the projected bottom will be June 2010 is clearly unsound as this implies it will take 14 months for prices to fall just 2%.

One of the sources quoted in the article is Moody's. This is the same Moody's that provided AAA ratings for the toxic mortgage backed securities we have all heard so much about.

The days of rock-bottom housing prices may be reaching an end.

According to the National Association of REALTORS, the number of Existing Home Sales fell by a modest 140,000 units last month. It's the fifth straight month in which home sales straddled the 4.5 million mark.

The national housing inventory is down 900,000 from its July 2008 peak.

These are two encouraging signs.

Meanwhile, in a separate report, the Commerce Department said the supply of newly-built homes for sale is at a 7-year low. This, too, is a positive signal for housing.

Home values are based on supply and demand. If the number of homes for sales falls while the number of buyers stays constant, home prices will rise. This is because the same number of buyers are competing for fewer properties. It's basic economics and that may be what we're seeing right now in the marketplace.

But the balance could shift further. Remember: the March housing data doesn't account for first-time home buyers that used the $8,000 First-Time Homebuyer Tax Credit. Because the stimulus package didn't pass until February, buyers on the program likely hadn't closed on their respective homes before March data was released.

There's a big piece of the demand side of the equation unaccounted for, in other words, and if you're an active home buyer now, you're probably hearing a lot about multiple-offer situations and seeing this action first-hand.

Data from the housing market hasn't been outstanding, but it's definitely not looking worse. Sales levels, inventories and home prices appear to be leveling off nationally and the number of active seems to rising.

Overall, it points to higher home values ahead.

Luxury haciendas and Biltmore, Phoenix homes could be one and the same description! The gated subdivision is your first hint of opulence, and next comes the pleasant drive to the cul-de-sac where you see twins of the boutique hotels that everyone adores. Cantera stone accents and glass doors glimmer in the sun, setting off subtle streaks of rainbows on the walls and inviting the Arizona scenery in. The fireplace is a monument by itself, with hand-carved details that somewhat repeats the signature design of the outside bar and kitchen. Flawless etchings, craftsmanship, and floor plans come together to bring you your own personal palace.  Check out our list of homes available in the Biltmore area.

http://www.phoenixhomebuyingnow.com/45087-Phoenix-AZ-Biltmore-Listings.aspx