Phoenix home-price rebound may be over


March 5, 2014

The big home-price rebound in the Phoenix area may officially be over. For the first time since last summer, the market experienced a month-to-month decrease in the median single-family-home sales price. A new report from the W. P. Carey School of Business at Arizona State University reveals that and other details about Maricopa and Pinal counties, as of January:

• The median single-family-home sales price was $196,900. headshot of Mike Orr, director of ASU real estate center Download Full Image

• Demand is very low, from both investors and normal homeowner-occupiers.

• Phoenix-area home prices are finally back in line with the Consumer Price Index, as if the recession and recovery had never happened.

Valley home prices started quickly rising after hitting a low point in September 2011, but they began slowing down this past July. Finally, this January, the median single-family-home sales price hit $196,900 – down 4 percent from December. It was the first month-to-month drop since the normal summer seasonal blips, and it’s largely due to a big decrease in demand/sales activity.

“January is usually the quietest month of the year for sales, but this January was far weaker than January 2012 and 2013,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business. “Despite the huge price increases between January 2013 and 2014, the total dollars spent on homes here this January actually dropped by 7 percent. This is the second lowest level of demand we’ve seen in 14 years, behind only 2008.”

Still, the median single-family-home sales price remained up 21 percent from last January, when it was at $163,000. Realtors will note the average price per square foot was up 19 percent. The median townhouse/condo price was up about 17 percent.

“The price gains now are weak, but it’s not clear that they’ll get much weaker or stronger,” explains Orr. “We’ve already seen a significant change in the market, which has completed its rebound from the artificially low prices between 2009 and 2011. Pricing is back to the level it would have attained if it had increased from 2000 in line with the Consumer Price Index.”

Demand from both investors and ordinary owner-occupiers is way down. Even though the available supply of homes for sale was up 47 percent from Feb. 1 of last year to Feb. 1 of this year, sales activity plummeted. Sales of single-family homes were down 23 percent from last January to this January. Sales of townhomes and condos were down 18 percent.

Luxury homes are one of the only bright spots in the market, with homes above a half-million dollars representing 14 percent more of the sales transactions this January than last January. However, even the supply of luxury homes is quickly rising, so sellers in that space will face tougher competition in 2014.

Investors continue looking to other parts of the country for bigger bargains, since Phoenix prices have risen. In January, the percentage of residential properties bought by investors was down to 21.1 percent from the peak of 39.7 in July 2012.

New-home sales were also down 21 percent from last January to this January, representing the steepest fall in new-home closings in several years. Millennials and those who lost their homes to foreclosure or short sale in the recession appear more interested in renting than buying. That’s led to an upward trend in multi-family construction permits. It could also lead to higher rental rates in the next two years, during which time, home sales may continue to be relatively slow.

“The market conditions suggest prices will struggle to make any further upward progress in 2014,” Orr adds. “With February through June the strongest part of the year, we may yet see a little forward movement, but it’s likely to be tentative at best. The real test will come in the second half of the year, which is likely to see lower prices unless demand takes a distinct turn for the better.”

Foreclosure levels remain below the normal, historic trends for Maricopa and Pinal counties. Foreclosure starts – owners receiving notice their lenders may foreclose in 90 days – were down 55 percent from January 2013 to this January. Completed foreclosures were down 54 percent.

Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded at www.wpcarey.asu.edu/realtyreports. A podcast with more analysis from Orr is also available from knowWPCarey, the business school’s online resource and newsletter, at http://knowwpcarey.com/index.cfm?cid=13.

ASU health solutions faculty, staff mentor high school students


March 5, 2014

Faculty mentors from the College of Health Solutions at Arizona State University recently advised young women interested in a career in health. These young women were from Mountain Pointe High School in the Tempe Union High School District.

Women’s Mentor Day, a half-day program, introduced students to the vast realm of opportunities in the health care industry. According to the U.S. Department of Commerce, just 24 percent of the science, technology, engineering and math (STEM) workforce is female. The College of Health Solutions mentors are hoping to increase that number. Adela Grando speaking at front of classroom Download Full Image

Alison Essary, director of student affairs for the college, was enthusiastic to introduce the young women to new areas that may not have been previously emphasized.

“It was a great opportunity for ASU faculty to create meaningful connections with female high school students interested in health professions,” she said.

Essary discussed her own pathway to health care along with Adela Grando, assistant professor with the Department of Biomedical Informatics; Erin Harper, instructor; and Shannon Ringenbach, associate dean of Barrett, the Honors College.

“Most of us took indirect pathways to achieve our current careers. None of us imagined we would hold our current positions in academia,” Essary said. Before coming to ASU in late 2012, Essary was a physicians assistant.

In addition to finances, they also discussed the importance of including women in prominent positions. “Neglecting the skills and talents of women will lead to a workforce that fails to represent our patient and student populations,” Grando said.

The mentors encouraged the young women to stick to their goals: “Don’t feel limited by the ‘traditional’ model of career and family,” Essary said.

Women’s Mentor Day demonstrated ASU’s commitment to mentorship at all stages of education. The mentors supported all career aspirations. “Follow your academic strengths and passions,” Ringenbach said. “Those will lead you to the most productive and fulfilling careers."

Essary said she was thrilled by the young women’s enthusiasm, and is looking forward to continued mentoring of others: “We are so happy to be working with these students – the future of health care!”

Written by Erinn Riley