Phoenix Arizona home prices fell 4.7% from January to February according to the Case-Shiller Home Price Index for Phoenix, Arizona.
That was a large decline, however, more recent data from other sources suggests prices may have NOT fallen between March and April. We won’t know if the Case-Shiller data substantiates that until Case-Shiller’s April data is released in late June.
Time Machine
The February 2009 Case-Shiller Home Price Index for Phoenix, Arizona was where it was 7 years earlier in February 2002. (Ah, remember when people thought you were golden if you bought at 2002 prices?)
On the other hand, Phoenix home prices have fallen 51% from the peak in June 2006.
Below are my comments from last December and they still hold true.
We probably won’t see prices of Phoenix homes strengthen until February or March (and those Case-Shiller numbers won’t be published until 2 months later). I’m guessing that by June there will be a lot of buzz about Phoenix home prices having bottomed out reflecting strong Spring sales and, in fact, that may be true in some areas of metropolitan Phoenix.
As always, the Case-Shiller index obscures the large differences within metro Phoenix sub-markets. This web site, Arizona Real Estate Notebook, is the best I’ve seen for allowing you to look at real estate trends by zip code and to tease out trends within metropolitan Phoenix.
Phoenix Home Price Index
The S&P/Case-Shiller Home Price Indices are calculated monthly using a three-month moving average and published with a two month lag.
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John Wake 04.30.09 at 9:51 am
I think it was Shift who suggested in a comment several months back that I add trendlines.
Concerned Citizen 04.30.09 at 4:21 pm
John, how far back does the index go? And where would the trend line be if you started from the 70s (assuming it goes back that far)?
Peter Fork 05.01.09 at 6:48 am
The long-term trend line from Case-Schiller is almost flat since 1945. There is no long term upward appreciation trend for house prices in general (adjusted for inflation).
http://www.mises.org/images4/Case-Shiller_LongRun.jpg
I like to compare house prices with unemployment and income, because they are important factors driving house prices (besides interest rates, inventory, and immigration). The real median income in Phoenix is about the same it was in 2000, but unemployment is now at 7.5% compared to 4% in 2000. Inventory is still near record highs, so there is still room for lower prices.
Again, it depends on the neighborhood, and this is where John’s data is so useful. Here is some zip code inventory data (current listings, March 09 sales):
Scottsdale 85255: 950 listings, 60 sales = 16 months
Scottsdale 85260: 340 listings, 20 sales = 17 months
Scottsdale 85259: 384 listings, 23 sales = 17 months
Tempe 85281: 84 listings, 6 sales = 14 months
Phoenix 85015*: 130 listings, 23 sales = 6 months
Mesa 85205: 296 listings, 40 sales = 7 months
Queen Creek 85242: 675 listings, 78 sales = 9 months
Chandler 85224: 200 listings, 27 sales = 8 months
Chandler 85249: 510 listings, 72 sales = 7 months
I think sellers in these Scottsdale zip codes are still in denial, and they will have to lower their prices to pre-2000 levels like in the other zip codes.
* Spectacular fall in prices in 85015 and zip codes around it. Look at 85017:
http://www.arizonarealestatenotebook.com/85017-phoenix-homes-for-sale-trends/
Ken44 05.01.09 at 5:21 pm
The question is how many MORE potential foreclosures are the banking getting ready to move on now that they aren’t worried about the below:
http://money.cnn.com/2009/04/30/news/economy/cramdown/index.htm?postversion=2009043017
azrob 05.02.09 at 12:49 am
phoenix currently has nearly 45000 homes in the foreclosure process. This has increased by 7000 in the last two months alone.
david wilson 05.02.09 at 8:55 pm
Weed out the bad areas, which is most of the entire metro area, and you have prices that are way above year 2002. (85017 is a complete hellhole.)