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Pinal County fourth quarter resale numbers dismal


February 02, 2007

MESA, Ariz. — Since hitting a high of 1,785 recorded sales in second quarter 2005, the Pinal County resale market has steadily declined to 720 transactions in the final quarter of 2006. This brought the 2006 total to 3,860 sales in comparison to 6,115 sales for 2005. Although the resale single home market in Pinal County improved in second quarter 2006 to 1,180 homes from1,110 homes in first quarter, it fell appreciably in the third quarter to 850 recorded sales. A year ago the resale market recorded 1,550 home transactions. For 2006, there were 67,035 sales recorded in Maricopa County.

Much like the sales activity, the median price has steadily eroded from $220,000 in fourth quarter 2005 to $191,500 for the fourth quarter 2006.

The median home price in Pinal County was down from 77 percent of the median price in Maricopa County ($260,000) in third quarter 2006 to 75 percent ($257,000) in the fourth quarter of 2006.

“As home prices in Pinal County drop relative to Maricopa County, the phrase ‘drive ‘till you can afford’ will again take on greater meaning in the Pinal housing market,” said Jay Q. Butler, director of Realty Studies at Arizona State University’s Polytechnic campus.

Although the average 30-year mortgage for fourth quarter 2006 was 5.9 percent (5.6 percent for a year ago), the declining home prices allowed the monthly mortgage payment for the median price, based on an 85 percent loan-to-value, to decrease from $1,075 to $965. It would be $1,300 for the median priced home in Maricopa County.

While Pinal County has a limited job base and commercial real estate sector, people were willing to drive increasingly longer distances to find affordable housing. Even though affordability has improved, higher gasoline prices and more congested highways have begun to limit the housing market in Pinal County.

“Because investors were also drawn to the inexpensive housing in Pinal County, higher prices have limited their role in the local housing market,” said Butler. “In order to reduce inventories, new home builders have been aggressively pursuing buyers through incentives such as specially priced upgrades, free pools and gift cards.”

The new home has become a strong competitive and attractive alternative to the resale home in Pinal County. Thus, there are many reasons for the slowing market and issues that will have to be overcome for any future recovery.

The median square footage for a resale home in Pinal County was 1,470 square feet, while it was 1,650 square feet in Maricopa County.

GREATER PHOENIX REAL ESTATE MARKET

Quarterly Resale Home Sales and Median Prices

Selected Cities in Pinal County

City First Quarter 2005 First Quarter 2006
Resales Median Price Resales Median Price
Apache Junction 545 $169,900 295 $229,500
Arizona City 70 95,400 60 143,500
Casa Grande 245 132,750 220 175,000
Coolidge 30 65,000 50 114,000
Eloy 15 72,500 30 119,900
Florence 30 130,500 30 195,950
Maricopa 85 178,770 95 250,000
Queen Creek 270 173,250 230 239,860
San Manuel 35 59,000 25 80,000
Tucson (Saddlebrook) 75 339,750 45 462,500
Pinal County 1,435 $162,000 1,110 $211,500
City Second Quarter 2005 Second Quarter 2006
Resales Median Price Resales Median Price
Apache Junction 520 $193,500 305 $224,450
Arizona City 100 105,900 65 139,900
Casa Grande 295 152,000 215 179,000
Coolidge 45 81,500 45 123,000
Eloy 40 71,460 40 89,000
Florence 40 126,500 25 170,000
Maricopa 120 222,500 95 256,500
Queen Creek 425 205,840 250 235,000
San Manuel 30 80,420 30 104,000
Tucson (Saddlebrook) 105 353,500 50 370,000
Pinal County 1,790 $186,000 1,180 $211,000
City Third Quarter 2005 Third Quarter 2006
Resales Median Price Resales Median Price
Apache Junction 410 $222,375 200 $224,000
Arizona City 95 134,450 55 145,220
Casa Grande 310 165,900 170 175,000
Coolidge 45 83,200 30 107,500
Eloy 40 87,000 25 85,000
Florence 40 186,100 20 178,000
Maricopa 115 245,450 70 217,625
Queen Creek 385 235,000 180 220,000
San Manuel 15 75,355 35 98,000
Tucson (Saddlebrook) 55 364,900 35 350,000
Pinal County 1,550 $214,000 850 $199,900
City Fourth Quarter 2005 Fourth Quarter 2006
Resales Median Price Resales Median Price
Apache Junction 360 $220,900 165 $216,500
Arizona City 95 145,000 35 139,900
Casa Grande 210 180,000 150 160,000
Coolidge 35 94,500 25 101,000
Eloy 30 80,000 25 106,000
Florence 40 165,000 15 169,000
Maricopa 90 252,000 55 220,000
Queen Creek 345 243,900 175 210,000
San Manuel 25 83,500 10 90,750
Tucson (Saddlebrook) 55 389,950 40 412,450
Pinal County 1,340 $220,000 720 $191,500