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Greater Phoenix Resale Market Continues Upward Trend In January


February 15, 2005

MESA, Ariz. — The new year started with the strongest January on record at 9,360 recorded sales, in contrast to last year’s 5,100 recorded sales. While sales activity continues to mount, so does the median sales price as it increased 24 percent from $156,000 in January 2004 to the current $194,000.

In midst of the ever continuing records of activity, there is mounting concern about the affordability of housing. The average 30-year mortgage for January 2004 was 5.3 percent, while it was 5.4 percent in January 2005. Based on an 85 percent loan-to-value, the monthly mortgage payment for the median price home was $735 a year ago, while it is $925 for January 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.

"The increasing number of rental properties has resulted in extreme competition based on lower rents and even concessions," said Jay Butler, director of the Arizona Real Estate Center at Arizona State University’s East campus. "Rental difficulties could lead to more homes being brought onto the market than the available supply of buyers."

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 $500,000 in North Scottsdale to $101,000 in the Sky Harbor area of the city of Phoenix. For January 2005, 41 percent of all recorded sales were for homes priced from $125,000 to $199,999 and 23 percent for homes priced over $300,000.

With 1,675 sales for January 2005, the resale townhouse/condominium market exceeded the 1,010 units sold for a year ago. The median home price increased 17 percent from last year’s $106,945 to $125,000.

The median square footage for a single-family home sold in January 2005 was 1,640 square feet, which is smaller than the 1,650 square feet reported a year ago. In the townhouse/condominium sector, the median square footage was 1,165 square feet, which is larger than 1,155 square feet reported a year ago.

In contrast to January 2004, recorded sales in the city of Phoenix increased from 1,460 sales to 2,685 sales, while the median sales price increased to $154,000 from $127,000. Since Phoenix is a geographically large city, the median prices can range significantly such as $101,000 in the Sky Harbor area to $260,000 in the Union Hills area. The townhouse/condominium sector improved from 300 to 485 sales, while the median price increased from $88,550 to $112,000.

The Scottsdale resale home market improved from 515 to 785 recorded sales. The median sales price continued its upward movement by increasing from $350,000 to $458,690. The median resale home price is $500,000 in North Scottsdale and $225,000 in South Scottsdale. The townhouse/condominium sector in Scottsdale improved from 225 to 375 sales, while the median sales price increased from $172,000 to $207,000.

The Mesa resale housing market grew strongly from 665 to 1,060 sales, while the median price increased from $144,000 to $172,900. The townhouse/condominium sector improved from 155 to 260 sales, while the median home price increased from $97,500 to $102,500.

Glendale improved from 390 to 640 sales and the median sales price increased from $148,950 to $171,450. The townhouse/condominium sector grew from 30 to 75 sales, while the median sales price increased from $83,900 to $99,700.

In comparison to a year ago, the Sun City resale market increased from 125 to 160 sales, with the median sales price increasing to $159,000 from $124,000. Resale activity in Sun City West increased from 65 to 95 recorded sales and the median sales price increased from $154,900 to $179,900. The townhouse/condominium market in Sun City increased from 80 to 110 recorded sales, while the median home price increased from $84,000 to $110,000. In Sun City West, activity increased from 15 to 25 sales, while the median sales price increased from $118,750 to $129,900.

The resale market in Gilbert was better as activity moved from 280 to 565 sales and the median sales price increased from $190,000 to $244,000. The townhouse/condominium market expanded from 5 to 20 sales, while the median sales price increased from $127,450 to $133,850.

For the city of Chandler, the resale market expanded from 325 to 625 recorded sales, while the median sales price increased from $165,000 to $219,000. The townhouse/condominium market improved from 45 to 65 sales, and the median sales price increased from $106,990 to $120,000.

The resale market in Tempe improved from 115 to 195 sales, with the median sales price increasing from $166,950 to $193,500. The townhouse/condominium sector increased from 65 to 75 sales as the median sales price increased from $110,000 to $129,950.

The highest median sales price was in Paradise Valley at $1,000,000 with a median square foot house of 3,210 square feet.

In the West Valley, the following communities represent 10 percent of the resale market, while it stood at 8 percent for a year ago.

  • Avondale grew from 105 to 220 sales with the median price moving from $146,250 to $188,140.
  • El Mirage improved from 50 sales ($123,500) to 155 sales ($150,410).
  • Goodyear moved from 75 to 195 sales, while the median price increased from $149,900 to $204,900.
  • Surprise increased from 170 sales ($145,115) to 370 sales ($195,000).