I’ve been harping for a while now about the Phoenix real estate market really being many sub-markets, that some sub-markets are doing far better than others. Unfortunately, I didn’t any data to quantify the differences.
Now, you gotta check out the Arizona Republic interactive charts on Phoenix real estate price increases by zip code.
You can’t miss the huge differences between zip codes but don’t forget huge differences will also exist within each zip code.
Be very careful how you interpret this chart.
Let’s say a zip code had a large price decrease last year. Does that make it more or less likely that zip code will have a large price decrease next year?
It could go either way.
It could be the downward trend will continue next year or it could be that prices have already “corrected” in that zip code and it will outperform the average zip code next year.
Similarly, a zip code that did great last year may under-perform the average zip code next year. So, be careful.
Don’t miss clicking on “details” in the right hand side of the charts on azcentral.com. That is, to see the “details” you have to click the link above to go to azcentral.com.
*The 2007 data include sales through August.
40 responses so far ↓
1 Paul Cooper // Oct 12, 2007 at 9:17 am
IMO, media prices are not very helpful. Dollars per square foot is where it’s at. And that number is down across the board (no matter what the zip code).
2 Paul Cooper // Oct 12, 2007 at 9:18 am
That was “median prices” not “media prices”. Sorry.
3 dan // Oct 12, 2007 at 9:48 am
What Paul is saying, “damn, things look pretty good”. I’m not sure what dollar per square foot is going to prove. Maybe that, a bunch of small houses, with relatively low dollar per square sold, dragging down the overall dollar per square foot makes the overall numbers look worse than they are? Its been almost 2-years of nay-sayers saying the sky is falling. This info further proves, they are wrong again…..
4 Russ // Oct 12, 2007 at 11:20 am
The sky is not falling, just Phoenix area house prices. My old house was in a suburban zip code showing a median price change of about negative 6% from 2006 to 2007 on the chart above. My old house model is selling for between 25% and 30% less than the late 2005 peak price. Several folks are asking more than that amount, but only those with these discounts are actually selling.
As far as I am concerned, if you have no (or very few) sales at reduced price levels, then the market value must be even lower than those prices. The few REOs that have hit the correct mark have won the first round of the race to the bottom. Each successive round will lead to lower prices.
5 Neal // Oct 12, 2007 at 2:48 pm
An unspoken message that can be drawn is that the median price for homes will probably also affect the percentage increase/decrease of the zip code. For example, yes, 85007 is up 14.5%, but the median price is only $217K. The medians at the low end are more likely to rise disproportionately, I would think, than other ‘median’ medians (the middle of the middle).
Conversely, the upper end (see zip 85262 at $1M+) is a ‘money is no object’ zip code and shows a 10.9% increase. (But my theory is shot to hell when you look at PV’s 85253! Maybe there’s also bargaining at the upper end.)
The final thought is that if you plotted these data points on a map, you would probably see a correlation among the variables of price and more central location. People are finally starting to see that sprawl has its disadvantages—and are willing to pay for less commute/travel time.
6 John Wake - Realtor // Oct 12, 2007 at 4:44 pm
Also, 85007 is a narrow strip just west of downtown Phoenix. It’s 7th Ave to 15 Ave, from Thomas Rd south to the river bottom. It’s a cheap but improving area.
“People are finally starting to see that sprawl has its disadvantages—and are willing to pay for less commute/travel time.”
Absolutely! … and you don’t have to compete with the new home builders.
7 Paul Cooper // Oct 13, 2007 at 4:01 am
The sky is certainly not falling but Phoenix house prices certainly are. Even in those zip codes that show a “Median” price increase, actual prices per square foot of comparables (no Dan, not comparisons of $/sqft of low sqft and high sqft homes but comparables of similar sqft homes) shows that $/sqft is down double digits across the board. So no, the sky isn’t falling but $/sqft certainly is. And next year it will be even lower till it recahes below the pre-bubble prices of 2004/2005 IMO.
BTW, good luck to all the falling knife catchers.
8 Ken44 // Oct 13, 2007 at 7:38 am
Imo, the worst of the market psychology is over. Interest rates will continue downward and like it or not the US movement will offer what amounts to a bail-out.
Now, I don’t think 2008 is going any better than 2007 but I doubt prices will drop that much further esp. in areas closer in.
Again the key factor in all this is the market psychology.
9 Paul Cooper // Oct 13, 2007 at 12:02 pm
It’s all about the inventory. And inventory in 2008 will continue to be at record high number of homes. Just wait till the mega-reset months of Feb and March of 2008. Demand is going to continue to be low (last I looked salaries have not increased any since the teaser rate and interest only loan days of 2005/2006 and even those are now gone) while supply is sky high. And that means prices will continue to plummet. Houses continue to be unaffordable with current salaries while supply is at sky high numbers and will continue higher. 2008/2009 will be the slaughter year for Phoenix IMO. A year after Las Vegas. Record number of resets are all ahead. The pain has not been felt in Phoenix yet as it has been running 1 year behind Las Vegas.
10 Paul Cooper // Oct 13, 2007 at 5:37 pm
And speaking of inventory… we just hit another record high with now 65,084 homes for sale. This is especially noteworthy as after August normally inventory starts to go down before it starts spiking up again in January. Not this time. By early spring 2008 we could be looking at 70,000+ homes for sale. And with a record number of resets coming Feb/Mar 2008 (takes about 6 months after that for the process to happen), IMO, during summer and fall 2008 we’ll see a real bloodbath.
11 Ken44 // Oct 13, 2007 at 6:37 pm
At this point what`s another 3-5000 more homes on the market? The inventory is already way out of whack. However, prices esp. those away from the newer developments have not dropped all that much from their peak in Sept. 2005.
I, too, recall this time last year the inventory going down but my feeling is many have simply decided to keep their homes on the market instead of re-listing them next Feb. I don`t think we`ll see a major spike like we saw this year because the homes will already be listed.
12 Ken44 // Oct 13, 2007 at 7:41 pm
“And with a record number of resets coming Feb/Mar 2008 (takes about 6 months after that for the process to happen),”
Yes, but by then some of the bailout programs being discussed in Congress will be in place and many home owners that would have faced foreclosure will likely end up keeping their property.
13 Paul Cooper // Oct 13, 2007 at 11:23 pm
“prices have not dropped all that much from their peak in Sept. 2005″
You are clearly in denial Ken and that means still more down ahead:
http://housing-watch.com/regionview.aspx?city=Phoenix&pct=50&g=m
14 Paul Cooper // Oct 13, 2007 at 11:30 pm
Based on a recent article I read, more than 50% of all homes sold in Phoenix during 2004/2005 were to investors/speculators. To this day they sit unoccupied. The bailout plans being discussed are for homeowners with a home to live in not investors or speculators with multiple unoccupied homes waiting to be flipped. You will be seriously dissapointed in 2008 IMO.
15 Ken44 // Oct 14, 2007 at 12:16 am
The median price paid for all homes sold in the combined Maricopa-Pinal counties metropolitan area was $245,000. That was down 2 percent from $250,000 in July and down 5 percent from $258,000 in August 2006, according to DataQuick Information Systems of La Jolla, Calif. The firm tracks real estate trends nationally via public property records. http://www.dqnews.com/RRMAAZ0907.shtm
“The bailout plans being discussed are for homeowners with a home to live in not investors or speculators …”
Don`t count on it.
You will be seriously dissapointed in 2008 IMO.
16 Ken44 // Oct 14, 2007 at 12:18 am
DataQuick http://www.dqnews.com/RRMAAZ0907.shtm
17 Ken44 // Oct 14, 2007 at 12:21 am
One more time. Here`s the link: http://www.dqnews.com/RRMAAZ0907.shtm
18 Ken44 // Oct 14, 2007 at 12:21 am
Guess not.
19 TJ79 // Oct 14, 2007 at 7:06 am
I would be interested to see the inventory in the core sub-markets (inside the 101/202 loop) vs. outside the loop (Anthem, Surprise, Maricopa etc…)
I live in an established neighborhood in the east valley, 20 minutes to downtown phx, and there are NOT a ton of for sale signs like everybody suggests.
So what if there are 20,000 homes for sale in Anthem, Surprise, Goodyear, Maricopa, Queen Creek…many buyers I talk to will now even consider living out there in the first place.
The trend has shifted to live closer to the city, I think if you’re inside the loop you’ll be fine.
20 Paul Cooper // Oct 14, 2007 at 7:21 am
So I take it then Ken you see nothing wrong with tax payer dollars bailing out the crooks, the frauds, the liars, the criminals then, eh? I wonder why that is?
No wonder this country’s moral integrity and (used to be) mighty dollar sinking faster than the titanic.
21 Paul Cooper // Oct 14, 2007 at 8:53 am
Here is a nice “catch the falling knife” tuscan property for you Ken in Las Sendas MLS#2832633 . Never been occupied too. From an investor/speculator that you so much like to see bail out. Been on the market for only 609 days (since 2005). He bought it new to flip it for $515,794 on 8/2005. Nobody ever lived in it. No back yeard. No window treatments (the carpet is badly discollored from where the sun been hitting it all this time). Here are the “catch the falling knife” price cuts during those 2 years: 824.9K/799.5K/769K/749K/735K/714.9K/699.9K/689K/644.9K/619K/599K From 824.9 that’s down 27% in past 610 days.
So please Ken, go ahead and use our tax paying dollars and bail him out as the $516K mortgage+HOA fees+property taxes and utility bills that’s been burning a hole in his pocket for those 2 years have cost him about $70K.
22 Paul Cooper // Oct 14, 2007 at 8:57 am
BTW, that $70K was assumed with 5%interest on a $516K loan for 2 years. If higher than that, then that $70K could be higher as well. His teaser rate could be north of $7.5-8% now for all I know.
23 John Wake - Realtor // Oct 14, 2007 at 11:25 am
Paul, That’s a very interesting story from a psychologically but not a real estate perspective. That seller is obviously a crazy person.
Who else buys at at $516K and thinks he can flip it without improvements for $824.5K? His pricing is so out of touch with reality that this case isn’t a good reflection of the general market or even Las Sendas.
My best guess is that for metro Phoenix as a whole 2008 will look a lot like 2007.
But 2008 is an election year and I think it’s likely that the housing market will become an election year issue with politicians stumbling over each other to help the homeowners in trouble, I mean, to help themselves win some votes. Who knows what kind of crazy programs they’ll dream up.
After 2008, my crystal ball seems to be saying that metro Phoenix as a whole will see several years of positive but below average appreciation.
Some areas will do much better and others much worse.
24 John Wake - Realtor // Oct 14, 2007 at 11:29 am
TJ79 is absolutely correct. Just looking at the median home prices in cities, the central areas are doing better than the outlying areas.
I’ll have new graphs up this coming week. It will be interesting to see what effect the September sales debacle had on median home prices. (The “sub-prime meltdown” in August killed September closings.)
25 Ken44 // Oct 14, 2007 at 3:39 pm
–But 2008 is an election year and I think it’s likely that the housing market will become an election year issue with politicians stumbling over each other to help the homeowners in trouble, I mean, to help themselves win some votes.–
Of course.
26 Paul Cooper // Oct 14, 2007 at 9:12 pm
John, I’ve got 100 of other cases just like the one I posted. Lots of unoccupied properties out there by flipper/investor/speculators who have been sitting unoccupied for more than 6-9 months. And lots more will be coming on the market during the next 9 months.
27 Paul Cooper // Oct 14, 2007 at 10:20 pm
John, the 08/2005 was the day he took delivery of the new construction. Very likely he signed the contract a year earlier at 08/2004. So that $825K included the appreciation between contract and delivery.
28 Paul Cooper // Oct 14, 2007 at 10:24 pm
–But 2008 is an election year and I think it’s likely that the housing market will become an election year issue with politicians stumbling over each other to help the homeowners in trouble, I mean, to help themselves win some votes.–
The votes they will lose by normal people if they bail out crooks, frauds, liars, flippers/speculators, will be a hell of a lot more. I for one will not vote for someone who gives away my tax paying dollars to bail out crooks, liars and fraudsters while this country continues to piss on its people without a national health plan. And I know of at least 4 blogs with large following who think the same as I.
29 Ken44 // Oct 15, 2007 at 4:25 am
– And I know of at least 4 blogs with large following who think the same as I.–
Yeah, but if you visit a site like the Ben Jones blog for example you`ll notice that although there`s often well over 150 comments for each thread it`s often the same people making multiply posts. In the over-all scheme of things the political power of housing blogs isn`t much.
30 Paul Cooper // Oct 15, 2007 at 5:40 am
I have to wonder if Republicans have turned into communists as there are way too many greedy Republicans looking for a hand out. Is America still a capitalists country or full of communist hypocrites???? Government bail out this and government bail out that. Sheesh…… and bail out greedy lying fraudster crooks at that, and to hell with hard working Americans that can no longer afford a house under their heads because of cash back deals under the table, crooked appraisers/loan officers/title companies/RE agents and liar loans. Makes me sick to see what our once great coutry has become.
31 dan // Oct 15, 2007 at 6:28 pm
If Paul Cooper says, “catch a falling knife” one more time, I am going to stab myself with a knife….PC is the first guy to rail against Republicans as communists, and then in the next sentence want “national healthcare”. PC is going to take every CNN/MSNBC story on flippers and speculators and infer that evey house bought in 2004 and 2004 was by a “greedy, lying, fraudster”. In fact, if that is true, then we should see some drastic price reductions-say, $130K for a 1300 square foot home in Gilbert. PC, its not going to happen. The Bush economy is too strong, there are too many jobs, and Phoenix is growing. And remember, homeownership is at an all time high…Your perception that no-one can afford a house doesn’t match reality…..
32 Paul Cooper // Oct 16, 2007 at 1:40 am
To Dan: On the issue of national healthcare
Every year more Americans die from disease than from war. If we can have a nationalized military to protect and defend our people from war, why can’t we have nationalized healthcare to protect and defend our people from disease???? Yet we continue to be the only western nation with a nationalized military but not nationalized healthcare…. Shows what a bunch of HYPOCRITES Republicans really are. And it proves that the motive of Republicans isn’t really to save American lives. It is GREED!!! To enrich their pockets. Even if they have to become communists with US tax payer money handouts and bailouts to greedy liars, fraudsters, crooks, to do it. But how can anyone be surprised when their own leaders are Republican drug addict hypocrites like Rush Limbaugh, and perverts like Lary Craig and Mark Foley. Sheesh…
33 dan // Oct 16, 2007 at 5:40 am
PC. Let me quote:
Amendment II. A well regulated Militia, being necessary to the security of a free, the right of people to keep and bear Arms, shall not be infringed.
I must of missed the part where America needs to supply national healthcare, public schools, social security. Hopefully, your national healthcare system is nothing like the public schools, or social security system.
Now back to the housing forum. You never addressed my points. Homeownership at all time highs, and when will Gilbert be back to a 130K?
34 Paul Cooper // Oct 16, 2007 at 9:35 am
Oh I see… America does NOT need to supply national health care, public schools, social security, but should bail out real estate crooks, fraudsters and liars, eh?? Sheesh…. no wonder republicans are going down the toilet faster than the titanic…
35 dan // Oct 16, 2007 at 10:50 am
PC. Not sure where you got the idea I wanted to bailout real estate crooks, but then again, I’m not sure where you get any of your ideas. But let me ask you this, what performs better, private schools or public schools, the American healthcare system, or say the Canadian healthcare system, and finally, would you have been better off investing 15% of your wage in the SP500 over the last 50 years or investing it in social security. When you are done addressing those questions, maybe you could quit dodging my last questions: Is home ownership at an alltime high, and when will my property in Gilbert be back down to $130K? If Phoenix was propped up by crooks as you say, then things should be reverting back to 2001 soon.
36 Paul Cooper // Oct 16, 2007 at 11:00 am
I actually answered your question, twice, but my posts have gone to John’s bit bucket. It’s happened before. Something to do with his software wrongly flagging the posts as spam. I hope he’ll see them and re-post them.
37 Paul Cooper // Oct 16, 2007 at 11:05 am
On the issue of which is better the American healthcare system or the Canadina, the Canadian of course. And don’t take my word for it:
http://www.foodconsumer.org/777/8/U_S_Health-Care_System_Scores_a_D_for_Quality.shtml
38 dan // Oct 16, 2007 at 12:19 pm
Do you ever read your links you post? Consumer for Health Care Choices is an organization promoting the privatization and consumer choices in healthcare. Exactly opposite of what you want—nationalize healthcare. Funny your rants get posted, but answers to my questions get flagged as spam?
39 Paul Cooper // Oct 16, 2007 at 1:08 pm
Do you ever read what you write? U.S. healthcare is ALREADY privatized. And it rates dead last amongst all western nations. And all the other nations all have nationalized care. So keep that head in the sand and keep on with the denial.
40 dan // Oct 19, 2007 at 12:02 pm
The only thing private in US Healthcare is the relationship between employer and insurance company. YOUR website reference wants to eliminate the 3rd party payer, and have PRIVATE citizens deal with healthcare providers. Our system is far from private….
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