Price
I said last month, “June is likely the peak for median home prices for the year” and on cue the median home price dropped $5,000 or 2% from June to July. I still “expect the median price for greater Phoenix to dip into the $240,000’s.”
If you have a home up for sale, I would strongly suggest dropping the price very aggressively until it sells. Get it sold ASAP. We’re not likely to see much good news for home sellers in the next 6 months.
Sales
The blue line is the number of listed homes sold by month. If you thought last fall was weak, wait until this fall.
Listings
Last year the number of listings (red line) dropped sharply starting in October. Last month I thought the slowing growth in the number of listings between June 15 and July 15 might foreshadow an early peak in inventory this year. But… no way.
The inventory of homes listed for sale increased at a good clip from July 15 to August 15 so it looks like the downturn in inventory (if we have one) won’t begin until around October like last year.
10 responses so far ↓
1 C // Aug 15, 2007 at 4:42 pm
Your posting on the next 6 months is very ominous. What do you anticipate?
2 John L. Wake - Realtor // Aug 16, 2007 at 7:39 am
You can see the seasonality in home sales, the blue line. It’s starting in August at a lower level than last year so I would expect that sales each month until January will be less than last year. That is, below 5,000 sales a month. This fall could be the low point in home sales for this current cycle.
3 Brian McMorris // Aug 16, 2007 at 8:45 pm
You are on to something here John. It can be seen from your charts that the huge increase in listings has not been cleared by lower prices. Until that price spike from 2004 to 2006 is reduced down to the long term growth trend prior to 2004 (maybe an average of $160K), listings won’t get cleared and will continue to grow.
The growth trend prior to 2004 reflected real demand as a result of steady local population and employment growth and an underlying 2-3% annual inflation rate. The affordability index is a measure of the long term average home price and is way out of whack right now, not helped by higher mortgage rates (should be 3x average family after tax income, not 5x).
As you have been requesting, there may also be some help coming from the bankruptcies of selected home builders, which will reduce inventory and probably average local price as inventory is liquidated. Beazer is on the brink. Should be an interesting two years, upcoming.
4 Ken44 // Aug 17, 2007 at 10:28 pm
The red line’s a monster!! Why do you feel prices are still resting in the mid 2005 price range these days instead of falling closer to the $200,000 mark? Sure, the economy is strong but the inventory is outrageous. Unless the Feds begin cutting rates soon and consumer confidence improves my guess is next year will be just as bad if not worse for the housing market.
5 John L. Wake - Realtor // Aug 19, 2007 at 9:14 pm
Right now, I don’t see why the number of sales or prices would be better in the next 12 months than they were in the last.
There is an argument to be made that sales and prices will fall more in the next 12 months than the last.
But that’s Valley wide. The interesting thing would be to find the stronger markets within the Valley. I have some things I’m working on.
6 VAUNTED // Aug 28, 2007 at 9:09 pm
the crash has begun friends. look for 20-30% price reductions across the valley (yes north scottsdale).
the good news is values will likely begin rising sometime in 2010.
7 kristen // Sep 20, 2007 at 5:07 pm
Vaunted, Email me, please. I want to know why you think prices are falling in North Scottsdale — my area — and why you think they’ll rise in 2010, a long time from now. “Crash” is strong verbal stuff, you know.
Kristen
8 John L. Wake - Realtor // Sep 20, 2007 at 5:12 pm
kristen,
What community or subdivision are you in? I can check for price trends in your community, if you like.
Phoenix is a bunch of different markets. Some markets will do fine while others… won’t. Historically, Scottsdale has been one of the strongest markets, perhaps the strongest market, in the Valley.
9 Phillip Smith // Oct 1, 2007 at 10:02 am
I am considering a move to PHX next summer. We previously lived in the Surprise area and consider moving back there again. What trends are you seeing in that area? Also, how would I get access to the foreclosure market? I assume that many of the homes in Surprise were financed with sub-prime mortgages. Thanks,
10 John L. Wake - Realtor // Oct 1, 2007 at 11:10 am
Prices in Surprise have been trending downward since summer 2005. See the link below. http://www.arizonarealestatenotebook.com/2007/09/14/arizona-home-price-graphs-updated-with-august-2007-data/
Foreclosures have a ton of risk. Were you asking about buying a home at a foreclosure auction? There are also pre and post foreclosures plays. They all take a lot of time and work. Were you planning to move here and rent before buying?
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