Tag Archives: home prices

home prices are rising

Phoenix-Area Home Prices Continue To Rise

Phoenix-area home prices continue to rise, but a short supply of available homes is causing the amount of activity in the market to fall. A new report from the W. P. Carey School of Business at Arizona State University gives an update on the hard-hit housing market of Maricopa and Pinal counties, as of April:

  • The median single-family home prices are up 25 percent from a year ago.
  • The overall supply of homes for sale is down 54 percent from last April.
  • The number of single-family homes sold this April was down 11.5 percent from last April, largely due to the lack of supply.

Anxious Phoenix-area homeowners will be relieved to see the median single-family home prices in the area went up 25 percent, from $112,000 to $140,000, between April 2011 and April 2012. Realtors will note the average price per square foot went up 16.5 percent in the same timeframe. However, the new W. P. Carey School report indicates we could be seeing even more activity, if more homes were available for sale.

“April is normally a very busy month for home sales, but this year’s sales are weaker than last year’s due to the unusual lack of supply,” says Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “We’re looking at only about 8,800 single-family homes for sale in the Greater Phoenix area, and more than 25 percent are priced at more than $500,000. The inventory of single-family homes for sale under $250,000 with no existing contract is equal to only 21 days of supply.”

Orr says we have a very unbalanced market with many more buyers than sellers. Home prices have been going up since they reached a low point in September 2011. Condominiums and townhomes are included in the boost. Their median sales price rose about 23 percent from April 2011 to April 2012, going from $72,500 to $89,050.

“Demand remains strong in the market, as evidenced by multiple-bid situations for the majority of resale home listings,” says Orr. “Most homes priced well are attracting multiple offers within a couple of days. Up to 20 or 30 offers for a home are becoming common, and often, many offers exceed the asking price. As a result, in the single month from March to April, the overall median sales price increased by 3.8 percent.”

The areas that suffered the most price damage during the recession, such as El Mirage, Maricopa, Tolleson and Glendale, are now seeing the most positive price movement. A few areas that were least affected by foreclosures, such as Cave Creek, Fountain Hills and Wickenburg, are still showing negative price movement.

Overall, foreclosures are down 62 percent in the Phoenix area from last April. However, one note of concern comes from the number of foreclosure starts – homeowners receiving notice their lenders may foreclose in 90 days. That number went up 4.7 percent from last April. Orr says he has seen a slight uptick in the rate of foreclosure notices since the signing of a recent legal settlement between the states and five of the nation’s largest housing lenders.

New-home sales, normal resales and short sales are up year-over-year, and most lenders have recently encouraged troubled homeowners to use short sales as a preferred alternative to foreclosure. Meantime, sales of homes owned by banks, Fannie Mae, Freddie Mac and the government are going down. In fact, so-called “distressed supply” dropped 81 percent from April to April.

“In order for us to see a more stable housing recovery, the basic rules of economics require prices to change enough to bring a new wave of sellers onto the market,” explains Orr. “That hasn’t happened yet, and so far, supply remains insufficient to meet demand.”

Orr’s full report on Phoenix-area home prices, including statistics, charts and a breakdown by different areas of the Valley, can be downloaded. More analysis is also available from knowWPCarey, the business school’s online resource and newsletter.

home prices

Phoenix Home Prices Up, New-Home Sales Coming Back

Foreclosures are dramatically down in the Phoenix-area housing market. This means fewer cheap homes coming onto the market, home prices rising for the sixth month in a row as a result, and many buyers finally starting to turn their attention from bargain resale homes to new-home sales. A new report from the W. P. Carey School of Business at Arizona State University reveals some trends for Maricopa and Pinal counties, as of March:

> The number of foreclosures completed this March was down a huge 60 percent from March 2011.

> The median single-family-home price went up more than 20 percent from last March.

> New-home sales rose 35 percent in the same time period.

Mike Orr, the report’s author, says the home-buying season is in full swing and peak activity will last until June. The median single-family-home price in the Phoenix-area was $134,900 in March. That’s up 20.4 percent from a year ago when it was $112,000. Realtors will note the average price per square-foot went up 14.4 percent.

“Prices have begun to rise at a fast pace, and bargains are no longer plentiful,” says Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Most homes that are priced well are attracting multiple offers within a couple of days, and many are exceeding the asking price.”

Orr emphasizes there’s been a dramatic change in the types of transactions happening in the market. Normal resales, new-home sales, investor flips and short sales are on the rise, while lender-owned home sales are down 61 percent from the year before.

Overall, the supply of single-family homes on the market (without an existing contract) went down 64 percent from March 2011 to March 2012. Orr estimates there is only a 23-day supply of homes priced under $250,000 available and that the market is very unbalanced, with far more buyers than sellers. The existing supply is heavily weighted toward the higher-priced end of the market.

“The very low number of inexpensive homes available for resale means more buyers are considering purchasing new homes as an option,” says Orr. “This signals the start of a distinct upward trend in new-home sales.”

When it comes to resales, Orr says all-cash buyers are still receiving preference over those with offers that require some form of financing. That’s because lenders need an appraisal, and appraisers are typically looking at months-old home sales for comparison. Those are priced well below the current market value.

“This puts ordinary home buyers at a severe disadvantage,” explains Orr. “More than 26 percent of Phoenix-area transactions are investor purchases.”

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed at wpcarey.asu.edu. More analysis is also available from knowWPCarey, the business school’s online resource and newsletter, at knowwpcarey.com.

Phoenix-Area Housing Market

Prices Up & Foreclosures Down In Phoenix-Area Housing Market

Several pieces of good news are trickling into the hard-hit Phoenix-area housing market. A new report from the W. P. Carey School of Business at Arizona State University shows positive trends for struggling homeowners, as of January:

  • Single-family home prices are moving higher.
  • Fewer foreclosures are coming into the pipeline.
  • The glut of underpriced homes on the market has ended, with a more balanced market now for houses under $300,000.

 

Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business, says things are shifting for the better in Maricopa and Pinal counties. He says the median price for all sales, including new-home sales, in the market was $120,500 in January 2012. That’s an increase from $113,166 (up about 6.5 percent) from January 2011. Realtors will note that the average price per-square-foot for single-family homes increased 3 percent from January 2011.

“Single-family home prices overall in the Phoenix area have been moving up since they reached a low point in September,” says Orr, the report’s author. “Also, looking forward, I expect a declining trend in foreclosures.”

A total of about 2,450 single-family home foreclosures happened in Maricopa and Pinal counties in January 2012. That’s significantly down from almost 4,200 in January 2011. The number of foreclosure starts – homeowners receiving notice that their lenders may foreclose in 90 days — is also down 49 percent from last January.

Orr also believes there is no longer an oversupply of homes for sale in the price range below $300,000. He says investors have bought up and eliminated the excess inventory. However, ample supply remains in the upper price ranges, which were less affected by foreclosures.

“Many people think there’s a glut of homes the banks are hiding somewhere, and that may be the case in other markets, but not here in the Phoenix area,” Orr says. “We’ve gone through so many foreclosures that the system has been working itself out for about five years. Everything is cyclical in housing. The market doesn’t go down forever, and it doesn’t stay up forever.”

Orr says the supply of homes listed for sale went down 42 percent from January 2011 to January 2012. As the supply dwindles, prices are likely to rise. Orr adds fewer homes are reverting back to the banks at auction, as investors snap up what bargains are left in the Phoenix area.

“Buyers from Canada, New Zealand and Australia, in particular, are taking advantage of the exchange rates to purchase investment and vacation homes,” Orr explains.

The market saw about 8,000 new- and existing-home sales in January 2012, up from fewer than 7,500 last January. The peak buying season normally starts in February, so more activity is expected.