This graph is based on MLS data and is a bit different from the graphs for 14 cities below which are based on ASU data of all home sales.
Price
The median home price (green line) in Greater Phoenix dropped $10,100 in September to $234,900. Since June, the median home price for Greater Phoenix has fallen $20,100 or 8%. In past years the median price has often leveled off after falling in September. We’ll see.
This was my advice last month.
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.
Ditto.
Sales
The blue line is the number of listed homes sold by month.
September had fewer sales than any other month on the graph going all the way back to early 2000. I think the August “sub-prime meltdown” was responsible for the extremely low number of closings in September.
It will be interesting to see if we get any rebound in sales in October now that the market is starting to digest the August sub-prime news, or if the hit in September just established a new lower baseline.
Listings
The inventory of homes listed for sale (red line) continued to increase at a good clip because sales were so low in September. Last year inventory declined rapidly starting in October but it hasn’t happened yet this year. If the inventory continues to increase in November, that would be (even more) bearish for home prices.
“MLS Listings” are measured at one point in time, usually the 15th day of the current month. “Median Price” of homes sold and the total number of home “MLS Sales” are for the entire preceding month.
36 responses so far ↓
1 Paul Cooper // Oct 20, 2007 at 2:48 pm
House prices and price affordability continues to be the single biggest reason why housing continues down on its death spiral. Prices need to revert back to before the false spike of 2004/2005 that was based on lies, fraud, cash back under the table, liar loans, and pure greed and speculation using toxic mortgages. If truly real estate agents want to get back on their feet this market and their business, they would do all they can to convince sellers to lower dramatically their prices. The quicker that happens the quicker the RE market will get back on its feet. Otherwise I see many years ahead of chinese torture for all involved in the RE field.
2 Ken44 // Oct 20, 2007 at 7:56 pm
Not if the Feds continue to cut rates.
If interest rates continue to slide I think it’s very possible we will not see much over-all price reduction next year esp. for homes in the older, more established areas of the Phx. metro. (The new developments in the outer areas may still think will get hit pretty hard.)
Perhaps it`s because of a growing population or the resilience of the economy but the fact is the excessive inventory hasn`t brought prices down nearly as much as was expected in many parts of the Phx metro.
3 Paul Cooper // Oct 20, 2007 at 8:25 pm
What exactly do you consider excessive? Comparables prices are down 20-25% across the Valley. Median prices is a useless indicator.
4 Ken44 // Oct 20, 2007 at 8:40 pm
20-25% from what? Not last year.
Mesa YOY down -5 Tempe -5
Check out the chart on the main page. Unless you bought after the summer of 2005 your still in pretty good shape.
5 Ken44 // Oct 20, 2007 at 8:44 pm
–Median prices is a useless indicator.–
Perhaps but so is cherry-picking price declines in the certain areas and claiming they reflect the Phx Metro as a whole.
6 Paul Cooper // Oct 21, 2007 at 2:56 am
You are quoting median pricing which I repeat is completely useless. How many houses do you want me to list that shows their prices to be down 20-25% from the 2005 peak? I’ve got hundreds. I posted one the other day that is still on the market after 615 days. The price started at $825K in 2005 and is now down to $600K or down 27%. Comparables are down from 800-900K in 2005 to 600-700K. Median pricing is a completely seless indicator. Comparables in $/sqft in area neighborhoods is the best one. And that shows that prices across the valley are down 20-25% since the peak of 2005. Mind you they are still ridicusly overpriced and have another 30% or more to go down based off the 2005 peak. I see no bottom till at least 2009-2010 and after that many years of flat line prices.
7 Paul Cooper // Oct 21, 2007 at 3:00 am
BTW, foreclosures and short sales are skyrocketing in Phoenix and banks are becoming more aggresive in slashing prices (and in turn comparables). They are more than 100+% since May. I expect that trend to continue with the big flood starting Feb/Mar 2008. 2008 is going to be a slaughter year for Phoenix. We ain’t seen nothing yet.
8 Paul Cooper // Oct 21, 2007 at 3:20 am
BTW, Phoenix area inventory just hit another ALL TIME HIGH. Now 65,562 properties for sale!!!!! Normally after August inventory goes down but this time inventory continues to expand. And the amount of homes for sale is about to expand further as a record number of foreclosures and short sales come on the market. During 2007/2008 we are going to get a record number of resets more than all of 2007 combined. We ain’t seen nothing yet.
9 Paul Cooper // Oct 21, 2007 at 3:22 am
That should have been “During Feb/March of 2008 we are going to get a record number of resets more than all of 2007 combined.”
10 Paul Cooper // Oct 21, 2007 at 3:34 am
And to make matters worse:
The American Southwest future is drying up http://www.nytimes.com/2007/10/21/magazine/21water-t.html?ref=magazine
11 Ken44 // Oct 21, 2007 at 3:40 am
–How many houses do you want me to list that shows their prices to be down 20-25% from the 2005 peak? I’ve got hundreds.–
Yeah, show me of list of properties in the older, more established areas of the Phx metro that currently are on the market 20-25% lower than mid-summer high of 2005.
12 Paul Cooper // Oct 21, 2007 at 3:47 am
I track east Mesa and Gilbert neighborhoods. If you want any more from those let me know.
13 Paul Cooper // Oct 21, 2007 at 3:48 am
BTW, from the article I posted above:
…….
“As one prominent Western water official described the possible future to me, if some of the Southwest’s largest reservoirs empty out, the region would experience an apocalypse, “an Armageddon.”
At the Senate hearing, Udall stated that the Colorado River basin is already two degrees warmer than it was in 1976 and that it is foolhardy to imagine that the next 50 years will resemble the last 50. Lake Mead, the enormous reservoir in Arizona and Nevada that supplies nearly all the water for Las Vegas, is half-empty, and statistical models indicate that it will never be full again. “As we move forward,” Udall told his audience, “all water-management actions based on ‘normal’ as defined by the 20th century will increasingly turn out to be bad bets.” ……..
This is a MUST READ article for all in the U.S. Southwest areas.
14 Ken44 // Oct 21, 2007 at 3:53 am
–I track east Mesa–
East Mesa would be fine. Let`s see the list showing homes on the market 20-25% lower than the summer of 2005.
15 Ken44 // Oct 21, 2007 at 4:50 am
My sister’s family owns a home in Greenfield Park subdivision and paid 185,000 Jan. 2005.
3 bedroom 2 bath 1580 sq ft. lot size 8500 sq ft. built 1986.
Homes similar are today priced in the 225,000 range. This area peaked in Sept. 2005 around 245,000
Current listings 3 bedroom 2 bath 1985-88 1400-1600 sq. ft Built 1985-89 No lot size
MLS#: 2737218 209,000 ( 1225 sq ft) MLS#: 2805011 213,000 MLS#: 2824953 215,000 (1325 sq ft) MLS#: 2807988 219,000 (1434 sqt.) MLS#: 2854601 219,000 MLS#: 2812592 229,000 MLS#: 2826141 230,000 MLS#: 2815506 245,000 MLS#: 2853064 245,000 (1991) MLS#: 2807581 250,000
Show me homes 1400-1600 sq ft. 1986-89 Greenfield Park subdivision or nearby 7000-10,000 lot size Currently listed in the $210,000 range.
priced in the 205,000
16 Paul Cooper // Oct 21, 2007 at 5:12 am
I can show you houses in the Boulder Mountain subdivision in the 1500-1800 sqft range that in the peak 2005 were selling for $370-400K range are now selling for 275K-299K range or down 25+%
MLS: 2854286 (1560 sqft) 275K MLS: 2851738 (1669 sqft) 289K MLS: 2821850 (1801 sqft) 283K MLS: 2721031 (1801 sqft) 299K
Same in Saguaro Mountain, same in Whisper Mountain, same in Sierra estates, same in Salerno Ranch, same at Desert Shadows etc.. etc.. etc… 20-25% is the norm in all the areas I track.
17 Paul Cooper // Oct 21, 2007 at 5:20 am
BTW, 20-25% down is nothing when you consider that these neighborhoods went up 50-100% on the false spike that was based on pure fraud, lies and under the table cash back deals, between mid 2004 to mid 2005. Prices will revert back to before 2004 prices and IMO as far back as 2000-2002 prices.
18 Ken44 // Oct 21, 2007 at 5:37 am
What are you talking about?
The list price for both properties below for example are over what the homes would have sold for back in Sept. 2005.
MLS: 2854286
MLS: 2851738
Did you try and research what these homes would have sold for back in 2005?
Where are all those East Meas homes currently listed that are 20-25% under the peak of 2005?
19 Paul Cooper // Oct 21, 2007 at 5:51 am
What are YOU talking about? Can you even read? I said comparable homes sold during the peak for 370-400K. You are proving that you can’t do research worth a damn.
For example this 1576 sqft sold for 383K at 2322 N Tierra Alta cir, this 1801 at 2304 Malachite sold for 400K, this 1738 sqft sold for 365K at 2355 Cabot.
So get a clue and stop lying.
20 Paul Cooper // Oct 21, 2007 at 5:57 am
Ken, with that last message of yours you proved beyond any doubt that you are in denial. Clearly you don’t have a clue what is going. The fact that you can’t even do research worth a damn proves that you have your head still in the clouds thnking it’s still 2005. Good luck. You are going to need it.
21 Paul Cooper // Oct 21, 2007 at 6:10 am
BTW, here is more: 1801 sq ft at 2303 N Adair cir sold for $375K, 1575 sqft at 2354 N Malachite sold for 390K, 1575 sqft at 2355 N Malachite sold for 393K, 1576 sqft at 2322 N Tierra Alta cir sold for 383K, 1801 sqft at 2304 Malachite sold for 400K, 1738 sqft at 2355 Cabot sold for 365K.
There are at least 6 more 1575 sqft ones that went above 350K. The peak as you see was at $400K. So prices have dropped since then by at least 25% or more.
So please learn how to do real research next time before again you put your foot in your mouth.
22 Ken44 // Oct 21, 2007 at 6:28 am
MLS#: 2854286 2306 N AZURITE Sold 05/03/2005: $250,000 Today on Market for $275,000
2322 N Tierra Alta cir Sold 07/27/2005: $382,500
However this is hardly a ave. example. The house accurate price range was closer to $300,000 at the time of sale. http://www.zillow.com/Charts.htm?chartDuration=5years&zpid=52429020
Resent sales of homes nearby: 2332 N Cabot Cir Sold 07/16/2007: $288,000
2316 N Adair Cir Sold 08/22/2007: $284,000
2360 N Cabot Cir Sold 06/29/2007: $297,000
2347 N Tierra Alta Cir Sold 06/14/2007: $290,000
23 Paul Cooper // Oct 21, 2007 at 6:33 am
Who’s talking about recent sales???? WE ARE TALKING ABOUT THE PEAK SALES versus current asking prices!!!! And peak sales were at 370-400K range. So current asking prices are DOWN 25% or more from those peak prices.
Just admit you were wrong instead of making a bigger fool of yourself.
BTW, I posted 6 sales during the peak. Go ahead and check those properties out and see if they are true or not. Then come back here and tell us how wrong you were. Sheesh…
24 Ken44 // Oct 21, 2007 at 6:33 am
–There are at least 6 more 1575 sqft ones that went above 350K. The peak as you see was at $400K. So prices have dropped since then by at least 25% or more.–
But how many of the properties you`ve listed peaked AFTER the summer of 2005. I said anyone who bought BEFORE was still in pretty good shape.
25 Ken44 // Oct 21, 2007 at 6:37 am
–WE ARE TALKING ABOUT THE PEAK SALES–
No I`m not. I was referrring to those homes bought BEFORE the Summer of 2005 still being in good shape.
26 Ken44 // Oct 21, 2007 at 6:44 am
Paul Cooper:
You wrote:
–How many houses do you want me to list that shows their prices to be down 20-25% from the 2005 peak? I’ve got hundreds.–
Still waiting.
27 Paul Cooper // Oct 21, 2007 at 6:54 am
The fact is that current prices are down 25% from peak prices as I showed you. But you go ahead and keep spinning your BS Ken. Facts are facts and you wouldn’t know one if it fell and hit you over the head.
BTW, expect another 20-25% down over the next 2 years.
28 Paul Cooper // Oct 21, 2007 at 7:07 am
Actually one of the houses I showed you on the list was bought BEFORE THE SUMMER OF 2005
2303 N Adair cir, SOLD on 04/2005 for $375,000
He is DOWN 25% already! So you are wrong even by you changing the rules of the discussion.
29 Ken44 // Oct 21, 2007 at 7:12 am
–The fact is that current prices are down 25% from peak prices as I showed you.–
Sorry but it certainly is not a “fact.”
Many areas of East Mesa (Greenfield Park subdivision for example) are down but nowhere near a 20-25% drop from the peak of 7/2005.
–BTW, expect another 20-25% down over the next 2 years.–
After watching you attempt to spin what I wrote to fit your agenda I wouldn`t trust you to tell me the correct time much offer a decent prediction for the 2008 Phx metro housing market.
30 Paul Cooper // Oct 21, 2007 at 7:20 am
I’m still waiting for you to respond on message #28. But no, I’m not holding my breath that you will admit you were wrong. One thing is certain. With people like you still in denial, the bottom is far far away. No bottom till deniers like you capitulate.
31 Ken44 // Oct 21, 2007 at 7:39 am
First of all I never changed the rules of the discussion and second that home is hardly a fair example when you look at to the Zillow price range for the property when it was sold. http://www.zillow.com/Charts.htm?chartDuration=5years&zpid=52429089
You mentioned “hundreds” of listings, yet come up with ONE and a questionable property at that.
32 Cbass // Oct 21, 2007 at 10:10 am
Wow, I think Ken and Paul should just kiss and make up! Agree to disagree if you will.
I also think that with roughly 18 months of inventory, declining prices, and sales falling there is not a real good argument that this is a good time to buy. Why take on unnecessary risk when you can sit back and wait for the dust to settle? When I see that these trends (inventory, prices, and sales) have truly reversed course then I may consider the purchase of a home.
How come you no longer provide the audio commentary John?
33 Paul Cooper // Oct 21, 2007 at 11:19 am
No Ken. I came up with 12 comparables between $370-$400K (including the 6 over $350K) in a neighborhood area of only about 30 sold homes 2005 that showed that PEAK prices were $370-400K and that CURRENT prices for sale there are DOWN 25% or more from those peak prices. And that is a FACT!! And that was exactly what we were talking about. That prices are down more than what median pricing shows them to be.
Now you Ken, can return to your RE dream lalaland environment where prices are just steady…. LMAO!!!
34 TJ79 // Oct 21, 2007 at 11:52 am
What’s with all the arguing? Anyways…
I don’t agree with all Paul has to say but I did find the article he posted very interesting. I wonder about how our drought conditions will impact the housing market.
If our reservoirs start to run dry this place is in serious trouble. If it were me running things I would ban outdoor lawns immediatly, and don’t allow them unless we see Lake Mead and Powell go up…way up. Allowing people to have a “winter lawn” in the desert, in the middle of drought, is amazingly stupid if you ask me.
If the media (and/or the science) convinces the population that the southwest is not a viable place to live anymore in a “warmer world”…everybody will bail out, population growth stops, housing prices will drop like a rock. I hope this never happens I as love it here in Phx…but mother nature always seems to have her way despite our best efforts.
Where is El Nino when you need it?
35 Paul Cooper // Oct 21, 2007 at 12:46 pm
NEWS: GREENSPAN BLASTS HOUSING BAILOUT.
http://investing.reuters.co.uk/news/articleinvesting.aspx?type=allBreakingNews&storyID=2007-10-19T194504Z_01_N19453144_RTRIDST_0_ECONOMY-CREDIT-WRAPUP-1.XML
36 Paul Cooper // Oct 21, 2007 at 1:17 pm
NEWS: Greenspan says new bank fund may hurt markets
http://www.reuters.com/articlePrint?articleId=USN1929517620071019
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