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ASU study: Phoenix-area home price declines slowing down

May 19, 2009

A new Arizona State University study shows a record drop for Phoenix-area home prices, followed by two months of more positive news in the Valley housing market.

The Arizona State University-Repeat Sales Index (ASU-RSI) measures changes in average Phoenix-area home prices from year to year. The latest report shows a record 37-percent fall in the index from February 2008 to February 2009. However, that is followed by lesser declines, with an estimated 36-percent drop in the index from March 2008 to March 2009, and a 34-percent drop predicted for April 2008 to April 2009.

“These figures suggest that prices may be declining at a slower rate than previous months,” says Karl Guntermann, the Fred E. Taylor Professor of Real Estate at the W. P. Carey School of Business at Arizona State University, who calculates the ASU-RSI with research associate Alex Horenstein. “In this market, this would be considered good news. Before this reversal, we were seeing the index drop another 1 or 2 percent every month.”

The index has now declined each month for two straight years, eclipsing the previous record of 17 months of drops in the early 1990s. Guntermann’s preliminary estimate shows the median Phoenix-area home price in April was about $117,500. If that estimate holds, it would put prices back to the level of November 1998.

The ASU-RSI is based on repeat sales, the most reliable way to estimate price changes in the housing market. Repeat sales compare the prices of a single house against itself at different points in time, instead of comparing different homes with different quality factors.

The ASU-RSI is produced through the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. The current report and archived reports are available at the Division of Real Estate – Repeat Sales Reports. Further ASU-RSI analysis is available at