Arizona Real Estate Notebook

Dr. Karl Guntermann at ASU just updated his Repeat Sale Index through May 2009.

From May 2008 to May 2009 the decline for lower priced homes was 48 percent compared to an annual decline of 26 percent for higher priced homes. These statistics confirm and quantify market perceptions that prices are falling more rapidly for the less expensive houses that dominate the current market, many of which are foreclosures. However, it might be surprising that the rate of decline for the lower half was almost twice as fast as it was for higher priced houses. In addition, lower priced houses have declined 62 percent from their peak in mid-2006 compared to a total decline of 39 percent for higher priced houses. This is in contrast to the last major decline from 1989 to 1992 where the upper portion of the market declined much more (13 percent) than the lower portion (4 percent).

The preliminary, overall median price for June was $120,000, up from $119,000 in May and $117,500 in April, indicating that April was the bottom of the current cycle in terms of house prices.

John’s Take

(The graph above was created by John Wake of HomeSmart using ASU data. The graph is not included in Guntermann’s report.)

• Metro Phoenix homes prices only depreciated 1% from April to May, according to the ASU data.
• June or July will likely be the first month in over 2 years where metro Phoenix home prices have not fallen.

It looks like our 5-year home price roller coaster ride is finally over and we’re coasting into the station.

Well, for metro Phoenix as a whole, anyway. Home prices in some areas of metro Phoenix have likely bottomed out already while home prices in other areas will likely continue to fall.

Nevertheless, metro Phoenix home prices as a whole will likely trail off seasonally this autumn as we coast into the station, that is assuming the $8,000 first-time home buyer tax credit doesn’t take off like cash-for-clunkers.