All 124 zip code real estate charts available in the right-hand column have now been updated through OCTOBER 2009 with the number of home sales, the median home price and the median home price per square foot.
Video Comments - Phoenix median home prices by zip code through October 2009
Phoenix home PRICE trends - Generally up or flat
- West Valley - Generally up median home prices
- Southeast Valley - Generally flat or up median home prices
- Scottsdale Area - A few signs median prices may be leveling off but generally down
{ 14 comments… read them below or add one }
azrob 11.30.09 at 8:22 am
John, your quote in the video, and one you have made on blogs before, that “there are many areas the market is not going down anymore” is going to come back to haunt you.
Once again, you are way too cheerleader happy with your data. a FEW months of barely positive price data does not a trend make. Priced started increasing at the low end at exactly the same time as the $8K credit for new home buyers got rolled out, hardly a coincidence. Up until the last few weeks, the credit was scheduled to end today, and buyers were thus in a hurry to buy. Now, with the extension, that hurry is not as evident and would only apply to those qualified first time buyers that didn’t get a house yet, a much smaller cohort than we had 4 months ago.
Your bottom call is completely baseless due to several facts:
1. We still have 50,000 homes in foreclosure in maricopa, this has not budged down at all yet, and is far larger than the active listings.
2. Mortgage loan applications for buyers have dropped to a 10 year low, thus giving evidence to my assertion that prices stopped dropping due to a short-term influx of buyers, motivated by the original quick deadline credit.
3. Mortgage loan 30/60/90 days lates are still increasing. Not only do we have more homes in foreclosure, we have more coming.
4. HAMP, and other loan modifaction efforts have delayed thousands of foreclosures. Within a few months, we will get failed/denied loan mod foreclosures added on top of the organic monthly foreclosure rate.
Enjoy what will be the last month or two of looking correct on your bottom call, but I’ll bet you $1000 you are wrong.
MPS 11.30.09 at 10:25 am
John, I wouldn’t take azrobs bet if he was paying 100 to 1 on it.
Prentend and extend = destroy. Kind of like Dubai…they just prentended for a while and now they have to face the music. Bernake is a joke. He’s been wrong, wrong, wrong, wrong and what they are doing now is wrong again.
Bernake’s false statements/predictions:
March 28, 2007: “The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.”
May 17, 2007: “We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”
Feb. 28, 2008, on the potential for bank failures: “Among the largest banks, the capital ratios remain good and I don’t expect any serious problems of that sort among the large, internationally active banks that make up a very substantial part of our banking system.”
June 9, 2008: “The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”
July 16, 2008: Fannie Mae and Freddie Mac are “adequately capitalized” and “in no danger of failing.”
And now they say that the recession is over and they want a strong dollar. One of those is an obvious lie. The other is a quite twisted statment (is the recession really over if they minus the effect of the government spending money they don’t have?)
Consumers are less employed, have less wealth, less income and have less credit every day. Remember, consumers make up over 70% of our economy. Reinflating the stock market might make some old folks feel better but it doesn’t do anything for the rest of us or the future of this country. They haven’t done what is needed to stop the rank and file from walking away from their homes.
They can have my real estate. I’m going to rent now. Ad ‘em to the pile.
ken44 12.01.09 at 2:46 am
—-1. We still have 50,000 homes in foreclosure in maricopa, this has not budged down at all yet, and is far larger than the active listings.—
My guess is 2010 will be similar to 2009 and banks will not dump the properties on the market at once. In order to keep prices stable they’ll let out only a certain % and the rest 2011 and perhaps 2012.
The market psychology seems to be changing and I’ve had two renters leave since summer in order to buy. And one other who wants a month to month lease so they can keep shopping.
Personally I don’t think housing prices will drop next year but rents are crashing and will continue to do so for a while. A 3 bed/2 bath 1500 sq. ft near loop 202 which went for $1050 in 2006 now goes for $825-$875 assuming you want to move it fast.
MPS 12.01.09 at 10:31 am
ken44,
2010 will be the same as 2009 if and only if…the house purchase credit gets extended all year & mortgage rates remain the same (at all time low). This means the fed has to keep on buying the piles of risky MBS poop.
Yes, rents are crashing and that has several effects.
1) It makes it less and less practical for people to rush out and buy
2) Investment property owners who already have negative equity will have their “investment” turn into a liability and eventually they will be forced to or chose to walk away adding to the bank owned pile up.
3) Vultures must now bid less on houses to keep their profit margin.
Mortgage 30+ delinquency rates are still climbing.
Wells Fargo is in the worst shape with 3rd qtr 16.05% up from 2nd qtr 14.23%
JPMorgan Chase jumped from 2nd qtr 12.98% to 3rd qtr 14.08%
However, public pressure to stop hammering down the dollar will mount against the politicians. Sooner or later the fed will no longer be buying MBS. Having kept the housing prices artificially inflated means they are still risky so nobody else will be willing to write mortgages at 4.5%. Interest rates rise and prices drop. Think about it….right now rates going back to 6% is like raising a mortgage payment by 20% or more. You don’t think that will force prices down?
Or do you think “extend and pretend” can continue for another whole year? I think it’s extremely irresponsible but I wouldn’t put it past those idiots running the show to keep on and on.
I think the shit will hit the fan by mid next year…or at least I hope. Otherwise, a deeper hole they dig.
ken44 12.01.09 at 2:56 pm
—Or do you think “extend and pretend” can continue for another whole year?—
What I am saying is I’ve noticed more and more renters looking to buy. I’m sure the $8000 is an incentive yet it seems the market psychology has begun to change. Now assuming banks don’t dump everything on the market at once my guess is prices will either remain steady or slightly rise in 2010.
MPS 12.01.09 at 3:49 pm
Well add me to your other list of people who are going from owning to renting.
But you can agree this market is “pretend” with temporary tax incentives, government buying the loans and artificially lowered supply? Then logic says that it has to stay pretend in order for things to remain the same does it not? And if so then what happens in 2011 or whenever “extend” stops? I think we both can agree it can’t go on forever.
azrob 12.01.09 at 9:23 pm
Ken:
My renter just bought, I’m dropping the price to below what it was 11 years ago. $795, nice 3/2 condo 2 miles from ASU…
BUT you are missing the point: this is not a psychology driven crash, and so whether or not people feel better isn’t going to make a difference. People felt great about housing in 2006, and look how that worked out! It is a crash based on fundamentals of too many homes, not enough worthy buyers. There simply aren’t enough first time buyers to keep up with the foreclosures, and most of those jumping in today are jumping too soon. In fact, we ended November with 1000 MORE homes in foreclosure than we started, and that is despite all the attempted loan mods etc.
So, now we enter the slow season, we have 4000 foreclosures a month, and the extended credit will have much less effect. After all, some number of non-home owners bought in the past three months rush, the remainder will be spread out over the next six months.
What happens after that? we have 50,000 homes in foreclosure do we have 50,000 more home buyers?
MPS 12.01.09 at 9:34 pm
Hey Rob…i might be interested, seriously.
I’m looking for a 3/2.
602-617-0347
-Mark
ken44 12.02.09 at 2:34 pm
–0-What happens after that? we have 50,000 homes in foreclosure do we have 50,000 more home buyers?—
No but I don’t think the banks will dump all the homes on the market next year. Where will the buyers come from? My guess is a lot will continue coming from California as the U.S. economy begins to recover. The AZ housing market is a disaster and this is the worst time to be selling but my feeling is that in 5 years things will be much better.
ken44 12.02.09 at 5:38 pm
—BUT you are missing the point: this is not a psychology driven crash, and so whether or not people feel better isn’t going to make a difference.—
It may not have been a psychology driven crash but you`re wrong in that market psychology isn`t important esp. with regards to housing.
Peter Fork 12.03.09 at 9:50 am
– No but I don’t think the banks will dump all the homes on the market next year.
When you think about it, it makes sense from the bank point of view to not dump all the homes on the market. Between an unsold foreclosed home on the market and another unsold foreclosed home not on the market, the difference for the bank is the one on the market will carry extra management costs and push down the prices, two negatives. Therefore it makes sense for the banks to put them on the market at the rate they are selling them.
This will probably keep the prices “soft” for a long while.
John, thanks again for your wonderful statistics. I do not comment much these days but I read your blog every week.
John Wake 12.03.09 at 10:18 am
Thanks for all the comments! I’ve been meaning to jump in but I’ve been having a bear of a problem importing data into Microsoft CRM.
My thinking on the Phoenix median home price is this.
Prices were so low in the lowest priced zip codes that the market cleared and the supply of homes available for sale decreased. So, if those 50,000 pending-foreclosure homes hit the market in a reasonable number of months, the market would probably clear (at lower prices but above $118,000). Of course, as interest rates increase, that will lower the market clearing price, but I’m still thinking the market would clear before going down to $118,000 again.
In addition, as the prices of higher priced homes fall, their sales have increased and that alone will tend to raise the median home price for metro Phoenix.
Anyway, that’s what I’m thinking, although I reserve the right to change my mind after lunch.
MPS 12.03.09 at 3:19 pm
Did anyone catch Ben Bernokio’s nose grow in the hearing today? Woo haaawwww. I doubt this reappointment is going to be the slam dunk that folks were thinking it was. Could Berskankie’s Helicopter be forced to land? I think a number of lawmakers are going to be putting a “hold” on this by the end of the week.
azrob 12.03.09 at 8:35 pm
John:
You are correct, as higher priced markets continue their price drop, the median tends to increase. I however, am far less certain we don’t retest the lows (case-shiller I’ll bet on, median… I still think will go below 100K, but not with my certainty on case-shiller going under 100)
1. Banks won’t drop homes. Well, they are foreclosing on about 250 a day so far this month, so I’m seeing signs of an increase from last months 200 a month. Plus, Bank of America just announced they would do precisily that: as people get removed from trial loan modifications, they will be added back to foreclosures. Are you reallyh going to argue banks won’t do what they just announced they are going to do? increase foreclosures?
And, as take two on this, you are failing to understand a principle of economics: Businesses and People make decisions they feel are in their OWN best interests, not in the global best interest. While, globally, all banks taken together might be best served by not foreclosing and selling all the homes all at once, for an INDIVIDUAL bank, this is the best course of action, especially if the other banks are holding off on foreclosing. In fact, all through this crisis, racing straight through to foreclosure got the bank the highest return, despite all the hoopla about modifying loans. Foreclose in 2007 and sell the darn house was much smarter than giving a 2 year loan mod, only to foreclose in 2009 and sell for 30% less.
2. moving short sales up as the main method of selling homes. Well, when homes interered freefall last fall, we had 10,000 bank owned, 10,000 short sales active on the mls. Prices swooned. Today, we have 5000 bank owned, 14,000 short sales. If the short sale becomes a legitimate quick selling home, similar to bankowned, guess what? we are right back to the same levels of distressed homes on the market.
3. Flippers. Flippers are cleaning up. My last sale, 7 of the 9 comps on the appraisal were flips that jumped 30K and more in price. Many of these homes have substantial money put into them (at least carpet paint, window treatments, kitchen updates, landscape repairs etc)
So, a portion of the price increase we are seeing is actual investment in the property, and hardly a market change.
Anyways, we can argue all we like, we’ll know in a year.