Pinal County resale housing market continues with decline trend

MESA, Ariz. — Due primarily to the holidays and the desire not to move children during a school year, recorded sales for resale homes tend to weaken in the third and fourth quarters. This traditional trend appears to be evident in Pinal County with 625 recorded sales down from the 970 recorded sold in the second quarter. Further, continued concerns have pushed the market lower from a high of 1,550 recorded sales in third quarter 2005 and 850 sales for a year ago. Housing activity slowed throughout the quarter as shown by the monthly activity — July with 230 recorded sales, August with 250 sales, and September with 150 sales. For comparison, for third quarter 2007, there were 11,625 sales recorded in Maricopa County.

Much like the sales activity, the median price has steadily eroded from $220,000 in fourth quarter 2005 to $200,000 in second quarter 2007, and $193,000 for the third quarter. It was $199,900 for a year ago. The median home price in Pinal County was 75 percent of the median price in Maricopa County ($256,975), while it was 77 percent for a year ago. Although the thirty-year mortgage remained unchanged at 6.2 percent, a lower home price drove the monthly mortgage payment for the median price, based on an 85 percent loan-to-value, to decrease from $1,040 to $1,005. It would be $1,340 for the median priced home in Maricopa County.

“Although affordability has improved, higher gasoline prices, more congested highways and limited employment opportunities continue to adversely impact the housing market in Pinal County,” said Jay Butler, director of Realty Studies in the Morrison School of Management and Agribusiness at ASU’ Polytechnic campus. “Because investors were also drawn to the inexpensive housing in Pinal County, higher prices have limited their role in the local housing market.”

In addition, 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. New home sales were 2,645 homes with a median price of $196,180. 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 1,660 square feet, while a new home was 2,185 square feet. In Maricopa County, the resale home was 1,745 square feet and 2,735 square feet for a new home and a median price of $276,000.

GREATER PHOENIX REAL ESTATE MARKET
Quarterly Resale Home Sales and Median Prices
Selected Cities in Pinal County