Here’s another nice piece from Catherine Reagor.
“The Valley’s new-home market is in transition, and we are probably only halfway through that transition,” said real-estate analyst RL Brown, publisher of the Phoenix Housing Market Letter. “Now, home builders are re-evaluating where and for what price range they can sell homes.”
Brown estimates the median price of a new home will drop to about $195,000 when metro Phoenix’s housing market is done correcting. That’s back to 2003-04 prices.
Hmm, I wonder where the median new home price is now? I focus on resale homes.
BTW, the median price of resale homes is in the 2003-04 price range in many metro Phoenix zip codes already. A few way out zips are at 2002 prices.
{ 3 comments… read them below or add one }
Philip 09.01.08 at 11:50 am
What is the vally’s median resale home price now?
redriver 09.02.08 at 11:16 am
From what I saw recently the valley’s median home price was just north of $200,000 which makes me wonder what would possess a “bottom” number of only 5-10 K less. Everyone still seems to be looking at this exit as if the prices only have to go to 2003/4 and we’ll be ok. At $195,000 with the median householld income of $51,863 (Phx/Mesa?Scts. MSA) that would be an affordibility index of 3.76! Nothing near what makes this town tick. That 3.76 puts us on par with Minneaopolis and Philly. Harvard has been tracking this index since 1980 (the latest AI numbers are from 2006 but since everything has fallen it should remain consistent) and it has always been a good way for me to tell how much stress the general population is under just to “afford” a home. The word of course should be buy since anything over 2.6 (Dallas 2008) is simply not “affordable” for anyone here in Phoenix. Phoenix was cooking with gas from 1998 - 2001 and our AI never got over 2.6. It was only when the investors kicked in that we went through the roof. 2007 we were at 4.8 which is on par with Santa Barbara. Tell me, is that a plan we should be following?
Until the median drops to $145-150,000 there will be no “bottom”, just another bull trap. Actually at 2.6 the number should be $134,843.
John Wake - Real Estate 09.02.08 at 11:30 am
redriver,
A minor point, the median new home price is above the median resale price. I can’t remember by how much traditionally. So, maybe there is $15,000 there.