May 17, 2010

Phoenix housing prices up 5.5 percent this year

Posted: May 17, 2010
Associate Professor Jay Butler
W. P. Carey School of Business Associate Professor of Real Estate Jay Butler's latest report confirms Phoenix-area home prices have gone up every month this year.

Phoenix-area housing prices have consistently gone up every month this year, despite tough economic times. The latest Realty Studies report from the W. P. Carey School of Business at Arizona State University confirms the median single-family home price in the Valley has steadily increased. However, it’s unclear whether the momentum will continue.

The median price has gone up almost 5.5 percent from $136,500 in January to $144,000 in April. Still, Associate Professor of Real Estate Jay Butler, who authored the new report, points to contradictions in the market.

“Several factors contributed to this increase, including the normal seasonal price hike that happens every spring and also less discounted prices being offered on foreclosed properties for resale,” Butler says. “On the positive side, the recent improvement in home prices does provide evidence of short-term appreciation, and it has also further enhanced the interest of investors in the local housing market.”

But, Butler adds, bargain hunters, short sales and the high number of foreclosures are still driving the market overall.

“Even though foreclosures as a share of recorded activity in the Phoenix-area housing market declined from 40 percent in March to 34 percent in April, this was still one of the highest levels of foreclosure activity in the last year,” he says. “The surge could be related to the end of foreclosure moratoriums put in place in late 2009 and the still-weak economy.”

Almost 3,500 homes were foreclosed on in April, way up from about 2,500 foreclosures last April. However, it is an improvement from March’s nearly 4,400 foreclosures. Foreclosures combined with the resales of previously foreclosed properties still account for 60 percent of the Valley’s single-family home market activity.

The number of homes resold in the Phoenix market in April remained relatively high at about 6,800. In March, about 6,500 homes were sold. Last April, just over 6,600 were sold.

In the townhouse/condominium market, foreclosure levels are much higher than last year. About 1,100 townhomes and condos were foreclosed on each month in March and April of this year. Last April, less than 700 townhomes and condos went into foreclosure. The median townhome/condo price has plummeted from $116,500 last April to just $95,000 this April.

Butler’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at http://wpcarey.asu.edu/realestate/Phoenix-Resale-Market-Reports.cfm. More analysis is also available from Knowledge@W. P. Carey, the business school’s online resource and biweekly newsletter, at http://knowledge.wpcarey.asu.edu.

Debbie Freeman, Debbie.Freeman@asu.edu
(480) 965-9271
Communications Manager, W. P. Carey School of Business