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First Quarter 2005 Resale Activity Compared to First Quarter 2004


April 19, 2005

With 10,035 recorded sales for March 2005, the first quarter of the year had 27,325 recorded sales. Although this is well above last year's 19,460 recorded sales for the same quarter, it is slightly below the record 28,760 sales set in second quarter 2004, when the market really started to pick up steam. While sales activity continues to mount, so does the median sales price as it increased 32 percent from $162,000 in March 2004 to the current $213,000. On a quarterly basis, the median home price increased from last year's $159,705 to $203,000 for a 27 percent increase.

In midst of the ever continuing records of activity, there is mounting concern about the affordability of housing. The average 30-year mortgage for March 2004 was 5.1 percent, while it was 5.6 percent in March 2005. Based on an 85 percent loan- to-value, the monthly mortgage payment for the median price home was $750, while it would be $1,040 for March 2005.

In remembering the late 1970s and 1980s, there are mounting concerns about whether the market can be sustained, especially the ever higher home prices. It is becoming increasingly difficult for young and minority households to purchase their first home to enter the housing game and to start moving up to better housing, according to Jay Butler, director of the Arizona Real Estate Center at ASU's East campus.

"Further, there are also concerns that people working in the area, especially teachers, policemen and firemen, cannot afford to live in the communities where they work," says Butler. "This results in them moving further out, making their commutes longer, which could become increasingly costly with gasoline prices on the rise."

The increasing number of rental properties has resulted in extreme competition based on lower rents and even concessions. Rental difficulties could lead to fewer future buyers and more homes on the market. For owner-occupants, higher interest rates combined with stable income and higher home prices will adversely impact the affordability of housing leading to a potential slower level of activity. Further, people with low interest rate mortgages, have little incentive to move to provide some additional stimulus to the market.

Since the Greater Phoenix area is so large, the median price can range significantly from $525,000 in North Scottsdale to $105,750 in the Sky Harbor area of Phoenix. For first quarter 2005, 38 percent of all recorded sales were for homes priced from $125,000 to $199,999 and 25 percent for homes priced over $300,000.

With 1,880 sales for March 2005 and 5,075 sales for the quarter, the resale townhouse/condominium market demonstrated improvement over last year's 1,695 sales for the month and 3,765 sales for the quarter. After being stable for two months the median home price increased from $125,000 to $130,000 for March 2005, while it was $111,000 for a year ago. On a quarterly basis, the median home price increased from last year's $110,000 to $127,200.

The median square footage for a single-family home recorded sold in first quarter 2005 was 1,650 square feet, which is slightly smaller than the 1,655 square feet reported a year ago. In the townhouse/condominium sector, the median square footage was 1,150 square feet, which is smaller than 1,185 square feet reported a year ago.

In contrast to first quarter 2004, recorded sales in the city of Phoenix increased from 5,340 sales to 7,650 sales, while the median sales price increased to $159,400 from $128,500. Since Phoenix is a geographically large city, the median prices can range significantly such as $105,750 in the Sky Harbor area to $270,000 in the Union Hills area. The townhouse/condominium sector improved from 1,035 to 1,410 sales while the median price increased from $92,875 to $110,000.

The Scottsdale resale home market improved from 1,895 to 2,230 recorded sales. The median sales price continued its upward movement by increasing from $346,000 to $463,000. The median resale home price is $525,000 in North Scottsdale and $234,000 in South Scottsdale. The townhouse/condominium sector in Scottsdale improved from 855 to 1,115 sales, while the median sales price increased from $170,000 to $223,700.

The Mesa resale housing market grew strongly from 2,380 to 3,135 sales, while the median price increased from $146,000 to $180,000. The townhouse/condominium sector improved from 540 to 780 sales and the median home price increased from $99,000 to $106,250.

Glendale improved from 1,460 to 1,875 sales and the median sales price increased from $146,000 to $180,000.The townhouse/condominium sector grew from 120 to 235 sales, while the median sales price increased from $82,000 to $90,950.

In comparison to a year ago, the Sun City resale market increased from 495 to 525 sales, with the median sales price increasing to $161,000 from $127,000. Resale activity in Sun City West improved from 250 to 260 recorded sales and the median sales price increased from $155,000 to $185,450. The townhouse/condominium market in Sun City increased from 295 to 345 recorded sales, while the median home price increased from $84,000 to $110,000. In Sun City West, activity increased from 80 to 100 sales and the median sales price increased from $116,500 to $130,000.

The resale market in Gilbert was better as activity moved from 1,095 to 1,665 sales and the median sales price increased from $188,000 to $249,950. The townhouse/condominium market expanded from 50 to 65 sales as the median sales price increased from $128,000 to $142,000.

For the city of Chandler, the resale market expanded from 1,285 to 1,870 recorded sales, while the median sales price increased from $167,190 to $230,000. The townhouse/condominium market improved from 145 to 205 sales and the median sales price increased from $110,240 to $124,000.

The resale market in Tempe improved from 455 to 590 sales, with the median sales price increasing to $206,425 from $165,000. The townhouse/condominium sector increased from 215 to 275 sales and the median sales price increased from $110,000 to $128,500.

The highest median sales price was in Paradise Valley at $1,150,000 with a median square foot house of 3,610 square feet.

In the West Valley, the following communities represent 10 percent of the resale market, which was at 8 percent a year ago.

  • Avondale grew from 365 to 625 sales with the median price moving from $145,000 to $195,000.
  • El Mirage improved from 215 sales ($123,900) to 425 sales ($161,900).
  • Goodyear moved from 345 to 570 sales, while the median price increased from $165,000 to $215,165.
  • Surprise increased from 645 sales ($150,000) to 1,165 sales ($200,000).