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Greater Phoenix resale numbers start 2007 above 2003 levels


February 13, 2007

MESA, Ariz. — As the new year began, the local resale housing market continued to slip with 4,520 sales recorded in January. This is down from the 4,620 sales of December 2006 and the 5,260 recordings of a year ago.

This is the lowest monthly level for January since 4,220 sales were reported in 2003, which was the year that the hyper-market began in the local area. Relying on January data as an indicator of the coming year is not wise, according to Jay Q. Butler, director of Realty Studies at Arizona State University’s Polytechnic campus.

“January sales are traditionally below the recordings of December, which are based on the push to get people into their homes for the holidays,” said Butler. “Because recordings are based on decisions made months before, January tends to be the depository of limited desire to look for and buy a home following the holiday season and a poor indicator of the coming year, which is better set by the traditionally strong month of March.”

If 2007 is to follow the traditional pattern, listings should be increasing with a corresponding improvement in buyer activity.  However, 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.

“As long as the international economy and political situation remains stable, the general expectation is that 2007 resale housing market should be a good year, but no where near the records,” said Butler.

Much like the sales activity, the median home price has been very stable at $260,000, an improvement from December’s $255,900 and last year’s $257,000. Although this is the first year-to-year improvement since August 2006, several areas are continuing to show declining price activity. For January 2007, 15 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. 

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 more than $300,000. The increase in the higher price levels demonstrates how the move-up market tends to become more obvious in a slowing market. Since the greater Phoenix area is so large, the median price can range significantly from $665,000 ($657,000 in December) in North Scottsdale to $148,000 ($150,000 in December) in the Sky Harbor area of the city of Phoenix.

Current home prices and interest rates are very comparable to a year ago, with the monthly payment of $1,300 unchanged. 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. 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. 

During 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 also has remained very stable with 850 sales for January 2007, while it stood at 880 sales for December 2006, but well below last year’s 1,225 sales. The median home price has been very stable at $175,000, while it was $165,000 for a year ago.

The median square footage for a single-family home recorded sold in January 2007 was 1,700 square feet, which is larger then the 1,620 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 1,110 square feet which is bigger than 1,090 square feet reported a year ago.

  • In contrast to January 2006, recorded sales in the city of Phoenix decreased from 1,610 sales to 1,305 sales, while the median sales price increased to $225,000 from $205,000 for a year ago. Since Phoenix is a geographically large city, the median prices can range significantly such as $148,000 in the Sky Harbor area to $353,500 ($315,000 in December) in the Union Hills area. The townhouse/condominium sector decreased from 430 to 300 sales, while the median price increased from $139,525 to $150,500.

  • The Scottsdale resale home market declined from 400 to 360 recorded sales, with the median sales price decreasing from last year’s $600,000 to $550,000. The median resale home price is $665,000 ($657,000 in December) in North Scottsdale and $308,000 ($350,000 in December) in South Scottsdale. The townhouse/condominium sector in Scottsdale also decreased from 200 to 190 sales and the median sales price decreased from $275,700 to $272,500.

  • The Mesa resale housing market declined from 615 to 475 sales, and the median price fell from $240,000 to $235,000 ($241,000 in December). The townhouse/condominium sector also fell from 200 to 110 sales, while the median home price increased from $149,000 to $165,000.
  • Glendale decreased from 410 in January 2006 to 335 sales, but the median sales price improved slightly, from $238,500 to $239,450 ($244,900 in December). The townhouse/condominium sector was stable at 50 sales, while the median sales price increased from $130,000 to $139,150.

  • For the city of Peoria, the resale market increased from 195 sales to 225 sales, while the median price moved from $247,250 to $260,000 ($258,450 in December). The townhouse/condominium sector remained at 25 sales and the median price went from $152,500 to $161,000.

  • In comparison to a year ago, the Sun City resale market fell from 100 to 80 sales, with the median sales price decreasing to $190,000 from $212,000. As resale activity in Sun City West stayed at 40 sales, the median sales price decreased from $243,500 to $238,725. The townhouse/condominium market in Sun City declined from 60 to 45 recorded sales, while the median home price decreased from $140,000 to $133,500. In Sun City West, activity remained at 15 sales and the median sales price decreased from $203,450 to $151,000.

  • The resale market in Gilbert decreased from 310 to 280 sales, and the median sales price decreased from $337,250 to $319,000 ($328,000 in December).  The townhouse/condominium market fell from 15 to 10 sales as the median sales price decreased from $212,500 to $195,750.

  • For the city of Chandler, the resale market stayed at 330 recorded sales, while the median sales price also was stable at $305,000 ($282,900 in December). The townhouse/condominium market declined from 45 to 30 sales, and the median sales price improved slightly from $177,750 to $178,000.

  • The resale market in Tempe decreased from 140 to 100 sales, with the median sales price increasing from $269,900 to $282,950 ($272,750 in December). The townhouse/condominium sector slowed from 110 to 30 sales and the median sales price increased from $181,000 to $201,000.

  • The highest median sales price was in Paradise Valley at $1,425,000 with a median square foot house of 3,010 square feet.

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

    • Avondale fell from 150 to 90 sales with the median price moving from $258,000 to $243,950 ($245,000 in December).

    • El Mirage decreased from 70 to 65 sales, while the median home price went from $224,000 to $202,000 ($209,750 in December 2006).

    • Goodyear declined from 100 to 70 sales, while the median price decreased from $275,000 to $260,000 ($257,000 in December 2006).

    • Surprise increased from 165 sales ($249,000) to 205 sales ($247,235), while it was $232,500 in December.