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Greater Phoenix resale market strengthens in March


April 10, 2007

MESA, Ariz. — March generally tends to be the first month that shows an improvement in a given year and the beginning of the resale season. With 5,385 sales, March did show some improvement over January (4,520 sales) and February (4,280 sales). Further, it was the strongest month since 5,685 were recorded in August 2006 and 5,040 sales in November. Thus, March showed all of the indicators of a traditional March and further supported the idea that the market has returned to its historical pattern. However, it was well below the 7,265 sales of March 2006 and 10,035 sales of March 2005, but comparable to the 5,340 sales of March 2002.

So far in 2007, a total of 14,185 homes have been recorded sold, in contrast to 17,980 for 2006 year to date and 27,325 sales for 2005 year to date.

“While the resale market is tracking near historical norms, the levels should be well below those of the last few years, because the current market lacks the market frenzy to own and/or invest at almost any price and reasoning,” said Jay Butler, director of Realty Studies at Arizona State University’s Polytechnic campus. “The general expectation is that the 2007 resale housing market should be a good year, but no where near the records, assuming that there are no negative geopolitical events and that the sub-prime problem remains fairly contained.”

Much like the ever increasing sales activity of the last few years, the rapid improvement in prices has disappeared. The median home price in March was $265,470, in comparison to $260,000 for February and last year’s $263,000. 

For March 2007, 15 percent of all recorded sales were for homes priced from $125,000 to $199,999, 42 percent for $200,000 to $299,999 and 40 percent for homes priced more than $300,000. Last year, the distribution was 17 percent of all recorded sales were for homes priced from $125,000 to $199,999, 43 percent for $200,000 to $299,999 and 39 percent for homes priced more than $300,000.

The increase in the higher price levels demonstrates how the importance of the move-up market emerges in a slowing market. Since the greater Phoenix area is so large, the median price can range significantly from $713,500 ($687,500 in February) in North Scottsdale to $150,000 ($139,500 in February) in the Sky Harbor area of the city of Phoenix.

At 5.8 percent, interest rates are basically unchanged from a year ago and even though home prices rose slightly, the monthly payment increased slightly from last year’s $1,310 to $1,325. 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. These concerns have been mounting as the problems of the sub-prime market and nontraditional financing become more evident.

Because townhouse/condominium units are popular with seasonal visitors, it is not unusual to observe an improvement in the early months of the year. Thus, March had 1,350 sales, in comparison to 1,050 for February and 1,750 sales for a year ago. The median home price increased from $175,000 in February to a record $181,000.

The median square footage for a single-family home recorded sold in March 2007 was 1,700 square feet, which is larger than the 1,615 square feet for a year ago. The larger size further demonstrates the role of the move-up sector in the local housing market. In the townhouse/condominium sector, the median square footage was 1,120 square feet, which is larger than the 1,095 square feet reported a year ago.

 

  • In contrast to March 2006, recorded sales in the city of Phoenix decreased from 2,300 sales to 1,450 sales, while the median sales price increased to $228,000 from $220,000 for a year ago. Since Phoenix is a geographically large city, the median prices can range significantly such as $150,000 in the Sky Harbor area to $336,000 ($305,000 in February) in the Union Hills area. The townhouse/condominium sector decreased from 570 a year ago to 400 sales while the median price increased from $149,025 to $165,000.

  • While the Scottsdale resale home market declined from 550 to 465 recorded sales, the median sales price increased from last year’s $595,000 to $635,000. The median resale home price is $713,500 ($687,500 in February) in North Scottsdale and $323,000 ($321,250 in February) in South Scottsdale. The townhouse/condominium sector in Scottsdale also decreased from 380 to 280 sales and the median sales price increased from $265,000 to $265,950.

  • The Mesa resale housing market declined from 830 to 620 sales, while the median price fell from $243,500 to $242,700 ($238,500 in February). The townhouse/condominium sector also fell from 240 to 190 sales, while the median home price increased from $153,250 to $158,400.

  • Glendale decreased from 570 to 355 sales and the median sales price decreased from $251,250 to $248,250 ($242,850 in February). The townhouse/condominium sector also slowed from 100 to 50 sales, while the median sales price increased from $143,850 to $148,850.

  • For the city of Peoria, the resale market decreased from 315 sales to 255 sales, while the median price moved from $282,000 to $270,000 ($270,000 in February). The townhouse/condominium sector decreased from 45 to 35 sales and the median price went from $158,950 to $165,000.

  • In comparison to a year ago, the Sun City resale market remained at 150 sales, while the median sales price decreased from $210,000 to $200,000. As resale activity in Sun City West improved from 65 to 70 sales, the median sales price decreased from $247,500 to $217,450. The townhouse/condominium market in Sun City declined from 105 to 75 recorded sales, while the median home price decreased from $144,950 to $131,000. In Sun City West, activity improved from 20 to 25 sales and the median sales price increased from $183,500 to $190,000.

  • The resale market in Gilbert decreased from 355 to 290 sales and the median sales price decreased from $322,500 to $295,500 ($307,500 in February). The townhouse/condominium market fell from 25 to 15 sales as the median sales price decreased from $210,000 to $200,000.

  • For the city of Chandler, the resale market fell from 510 to 380 recorded sales, while the median sales price decreased from $295,000 to $293,850 ($307,500 in February). The townhouse/condominium market increased from 55 to 65 sales, but the median sales price declined from $175,000 to $170,000.

  • The resale market in Tempe decreased from 190 to 125 sales, with the median sales price decreasing from $288,400 to $278,750 ($280,000 in February). The townhouse/condominium sector moved from 90 to 95 sales and the median sales price increased from $190,500 to $198,500.

  • The highest median sales price was in Paradise Valley at $1,600,000 with a median square foot house of 3,810 square feet.

  • In the West Valley, the following communities represent 9 percent of the resale market.

    • Avondale fell from 160 sales from a year ago to 100 sales, with the median price moving from $256,000 to $232,280 ($242,080 in February).
    • El Mirage decreased from 110 to 40 sales, while the median home price went from $220,000 to $213,750 ($206,000 in February).

    • Goodyear improved from 95 to 105 sales, while the median price decreased from $281,000 to $255,000 ($270,000 in February).

    • Surprise decreased from 285 to 250 sales, with the median price moved from $255,500 in March 2006 to $241,500 ($245,000 in February).