Commentary 2/8/11


	YUMASTATS Data reporting for Yuma, Arizona's financial, developmental, and business interests.

	YUMA STATS COMMENTARY
	Up-to-date News for the: 1st Quarter 2011

February 8, 2011

The opinions and commentary presented on this site are solely those of Yuma Stats and commentator. There is no actual or implied concurrence, agreement, or endorsement of this commentary on the part of Yuma Stats subscribers.

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This commentary is brought to you by:

Land Mark Valuation Services

Mr. Mark Nelson MAI
P.O. Box 650
Gilbert, Arizona 85299
(480) 892-2166

             New Year Starts
     With Higher than Average
              Foreclosures

In our first complete report for 2011 we find area foreclosures for January well above last year's average.

165 Notices of Trustee Sale were issued during January 2011 compared to 160 over January 2010.   This year, 65 were cancelled leaving the residual for January foreclosures at exactly 100.

2010 ended with a foreclosure average of 78 per month.

Foreclosure rates dropped over much of 2010. Decline even accelerated through last November and December. A yearly low was set during November 2010 with only 115 Notices issued over that 30-day period.

Recent government-imposed review of lender documentation was presumed to impede the foreclosure pipeline and cause much of year-end slowing. It appears that whatever impact these reviews had has now subsided. Most of the impact occurred over the 4th quarter of 2010 with 2011 returning to business as usual.

Although this initial count for 2011 is high, we continue to forecast a lower than 2010 monthly rate for the remainder of this year. Prior to the late-2010 documentation review, foreclosures were still in decline although in less proportion than suggested by the year-end total.

Foreclosures will also continue to exert inordinate down pressure on home values throughout 2011. The unfortunate situation is that any foreclosure impact more than 100 per year cannot be absorbed without detriment to prevailing values.

        New Residential Sales
                  Changing

Before addressing change in the contemporary new residential market, let's look at the earliest report for 2011 sales. Seven regional sales were recorded for the first two weeks of January for the entire region.

At the current rate we may expect to finish 2011 at less than 200 sales. This would be well below our own forecast and a return to sales volume circa 2002.

Of the 7 sales, only 2 were finished homes with remaining sales comprised of traditional RV lots or bare, improved land.

Continued Next Column

A new phase in market evolution began over the last half of 2010. With the sales benefit of tax incentives gone, competition with existing home sales heightened. In a market now dominated by foreclosures and short sales, interest in new homes has fallen remarkably.

Several developers have closed sales for their former line of subdivision models and have reverted to simple lot sales. For the determined new home buyer, new opportunities may exist that weren't available before. These would be like building a home in subdivision "A" but using a model (or custom idea) formerly only available in subdivision "B."

Through close study, this could enable a well-appointed product on a relatively inexpensive lot or vice versa depending on preference. For anyone interested, it would be worth a shot to see what the subdivision of your dreams is doing to cope with this dreadful market as some buyers have already done.

Report of Regional GDP
Due Soon

After a 3-year wait, we're expecting publication of the regional Gross Domestic Product for the Yuma MSA.

The recession has invalidated several long-term reports from government analysts since projections have proven to be grossly inaccurate, Among these are the 2007 economic census that has since been largely ignored for forecasting. The catastrophic extent of the recession simply rendered any utility of these numbers as moot.

Conversely, the GPD summary is simply as the title suggests. We'll see new measurements as to the impact the recession has had locally. While many sections duplicate the individual reports we provide, the summations are quite elaborate and informative for a historical perspective.

As we did three years ago, Yuma Stats will again provide a summary to subscribers at no additional cost.

We may have January's housing permits by next time along with our first hotel occupancy numbers for 2011...

- Paul