Greater Phoenix resale home market experiences increased activity

December 12, 2006

MESA, Ariz. -The local single-family resale market has settled into a very stable pattern, from the hyper-activity of last year. There were 5,040 recorded sales for November 2006, slightly up from the 4,985 sales in October 2006, but below last years 7,195 sales. This is the lowest monthly level for November since 4,305 sales were reported in 2002. So far in 2006, there have been a total of 62,415 sales for a monthly average of 5,675 sales. For 2005 year to date, there were a total of 104,360 sales or a monthly average of 9,485 sales, while it was at 94,075 sales for 2004 year to date, with a monthly average of 8,552 sales. The current level of activity is very comparable to that recorded in 2003 year to date (66,260 sales).

Much like the sales activity, the median home price has been very stable at $259,000, a slight improvement from October's $257,000 and September's $256,900. It is still below last year's $263,000 and the record of $267,000 set in June 2006. For November 2006, 15 percent of all recorded sales were for homes priced from $125,000 to $199,999, 44 percent for $200,000 to $299,999 and 38 percent for homes priced over $300,000. Last year, the distribution was 20 percent of all recorded sales were for homes priced from $125,000 to $199,999, 40 percent for $200,000 to $299,999 and 36 percent for homes priced over $300,000. Since the Greater Phoenix area is so large, the median price can range significantly from $715,000 ($635,000 in October) in North Scottsdale to $182,000 ($170,000 in October) in the Sky Harbor area of the city of Phoenix.

Since current home prices and interest rates are very comparable to a year ago, the monthly payment of $1,320 is the same as a year ago.

"Even though mortgage interest rates have been declining for the last few months, limited home appreciation and household income continues to raise concern about the ability of some homeowners to maintain their homes," said Jay Q. Butler, director of ASU's Arizona Real Estate Center at the Polytechnic campus. "This may be especially evident for those that have used some of the more creative financing instruments, such as option payment plans and initially low interest rate adjustable mortgages."

Over the last few years, the townhouse/condominium market has had increased popularity for owner-occupancy, especially for young and minority households, and investors. This housing sector has also remained very stable with 920 sales for November 2006, while it stood at 930 sales for September 2006 and 915 sales for October, but well below last year's 1,600 sales. So far in 2006, there have been 13,120 sales, while there were 19,890 sales a year ago. The median home price increased to $172,000 ($175,000 in October), while it was $165,000 for a year ago. The median square footage for a single-family home recorded sold in November 2006 was 1,650 square feet, which is larger than the 1,615 square feet for a year ago. In the townhouse/condominium sector, the median square footage was 1,110 square feet, which is bigger than the 1,095 square feet reported a year ago.

In contrast to November 2005, recorded sales in the city of Phoenix decreased from 2,140 sales to 1,575 sales, while the median sales price increased to $226,160 from $215,000 for a year ago. Since Phoenix is a geographically large city, the median prices can range significantly such as $182,000 in the Sky Harbor area to $330,000 ($313,000 in October) in the Union Hills area. The townhouse/condominium sector decreased from 510 to 315 sales while the median price increased from $140,000 to $149,900.
While the Scottsdale resale home market declined from 475 to 400 recorded sales, the median sales price increased from last year's $595,000 to $630,000 ($548,500 in October 2006). In North Scottsdale, the median resale home price is $715,000 ($635,000 in October) and $330,000 ($300,000 in October) in South Scottsdale. The townhouse/condominium sector in Scottsdale also decreased from 285 to 215 sales, but the median sales price increased from $260,000 to $275,000.
The Mesa resale housing market declined from 840 to 600 sales, while the median price fell from last year's $241,000 to $240,000 ($235,000 in October). The townhouse/condominium sector also fell from 260 to 115 sales, while the median home price increased from $150,000 to $153,350.
Glendale decreased from 580 to 350 sales, but the median sales price slightly decreased from $247,250 to $247,000 ($248,000 in October). The townhouse/condominium sector also declined from 100 to 55 sales, while the median sales price increased from $89,340 to $136,000.
For the city of Peoria, the resale market fell from 315 sales to 225 sales, while the median price moved from $280,000 to $270,000 ($257,500 in October). The townhouse/condominium sector slowed from 40 to 30 sales and the median price went from $158,750 to $169,500.
In comparison to a year ago, the Sun City resale market fell from 130 to 100 sales, the median sales price decreased to $190,000 from $225,000. As resale activity in Sun City West fell from 60 to 50 sales, the median sales price decreased from $242,500 to $220,000. The townhouse/condominium market in Sun City declined from 80 to 55 recorded sales, while the median home price improved very slightly from last year's $145,000 to $148,500. In Sun City West, activity fell from 40 to 20 sales and the median sales price decreased from $186,000 to $160,000.
The resale market in Gilbert decreased from 425 to 285 sales, and the median sales price decreased from $324,500 to $308,000 ($328,000 in October). The townhouse/condominium market fell from 25 to 10 sales as the median sales price decreased from $229,950 to $218,000.
For the city of Chandler, the resale market slowed from 520 to 335 recorded sales, while the median sales price remained the same as last year's $295,000 ($298,000 in October). The townhouse/condominium market declined from 50 to 30 sales and the median sales price improved from $179,200 to $185,000.
The highest median sales price was in Paradise Valley at $1,690,000 with a median square foot house of 3,995 square feet.
In the West Valley, the following communities represent 9 percent of the resale market, while it was 10 percent for a year ago.
- Avondale fell from 190 to 115 sales, with the median price moving from $265,000 to $245,000 ($247,000 in October).
- El Mirage decreased from 105 to 70 sales, while the median home price decreased from $222,500 to $200,000 ($205,000 in October).
- Goodyear declined from 100 to 80 sales, with the median price decreasing from $286,500 to $252,000 ($275,000 in October).
- Surprise decreased from 350 to 200 sales, with the median price dropping from $263,590 to $246,000, ($237,000 in October).