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ASU study: Phoenix-area home prices up in all regions

October 20, 2009

For the first time since 2007, average home prices went up in all regions of the Phoenix area from one month to the next. A new report from the W. P. Carey School of Business shows a slight increase of 2 percent Valley-wide from June to July. It also shows improvement in most Valley cities, including Glendale, which has been among the hardest-hit areas since house prices began to fall.

"The worst appears to be past, but the large number of foreclosures likely to hit the market through 2010 makes it difficult to predict the direction of house prices with any certainty," said professor Karl Guntermann, the Fred E. Taylor Professor of Real Estate at the W. P. Carey School of Business, who authored the report. "The increased prices primarily reflect foreclosed houses that have been purchased by investors and first-time buyers taking advantage of the tax credit."

The Arizona State University-Repeat Sales Index measures changes in average Phoenix-area home prices from year to year. The new July 2009 report shows home prices declined Valley-wide by 28 percent since last year. That's slightly less than the 31-percent drop from June 2008 to June 2009, and the 33-percent fall from May 2008 to May 2009. Preliminary estimates for August and September also show lesser declines of 25 and 23 percent, respectively.

Guntermann noted the index has now shown declines for 29 straight months. The total drop from the peak in mid-2006 is 48 percent. Lower-priced houses have been hit harder, falling 60 percent, while higher-priced homes fell an average of 37 percent.

The median price for Valley home sales in July was $125,000. That's up from $122,000 in June. Preliminary estimates for August and September are $126,500 and $130,000, respectively.

Also this month, Guntermann introduced a new element into the ASU-RSI. He is now tracking townhouse and condominium sales, which are not recovering quickly.

"Unlike in the single-family market, prices in the townhouse/condo market have continued to decline at an increasing rate, reaching a 36-percent annual drop by July of this year," said Guntermann. "There is considerably more volatility in the townhouse/condo RSI, where the index dropped 4 percent between June and July."

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