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Pinal County resale housing market experiences drop in median price, competition from new homes


July 26, 2007

MESA, Ariz. — Recorded sales for resale homes tend to be strongest in the second quarter and this traditional trend continued in Pinal County with 970 resale homes recorded sold, which is better than the 840 recorded sold in the first quarter. However, continued concerns have pushed the market lower from a high of 1,785 recorded sales in second quarter 2005 and 1,180 sales for a year ago. On a monthly basis, sales activity was very stable with 310 sales in April and 330 sales in both May and June. For comparison, in second quarter 2007, there were 14,990 sales recorded in Maricopa County.

Much like the sales activity, the median price has steadily eroded from $220,000 in fourth quarter 2005 to $204,600 in first quarter 2007 to $200,000 for the second quarter. It was $211,000 for a year ago. The median home price in Pinal County was 76 percent of the median price in Maricopa County ($263,500), while it was 80 percent for a year ago. The combination of lower interest rates, from last year’s 6.2 percent to 5.9 percent, and home prices has driven the monthly mortgage payment for the median price, based on an 85 percent loan-to-value, down from $1,100 to $1,010. It would be $1,330 for the median priced home in Maricopa County. Thus, the phrase “drive ‘till you can afford” has taken on greater meaning in the Pinal housing market.

“Although affordability has improved, higher gasoline prices and more congested highways continue to impact the housing market in Pinal County,” said Jay Butler, director for Realty Studies in the Morrison School of Management and Agribusiness. “While investors were drawn to the inexpensive housing in Pinal County in 2005, today’s higher prices have limited their role in the local housing market.”

In order to reduce inventories, new home builders have been aggressively pursuing buyers through incentives such as specially priced up-grades, 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 2,425 homes with a median price of $201,880. 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 1,610 square feet, while a new home was 2,200 square feet. In Maricopa County, the resale home was 1,700 square feet and 2,550 square feet for a new home (median price of $289,995).


GREATER PHOENIX REAL ESTATE MARKET

Quarterly Resale Home Sales and Median Prices

Selected Cities in Pinal County

City First Quarter 2006 First Quarter 2007
Resales Median Price Resales Median Price
Apache Junction 295 $229,500 210 $235,000
Arizona City 60 143,500 40 136,000
Casa Grande 220 175,000 95 180,000
Coolidge 50 114,000 35 125,900
Eloy 30 119,900 15 118,450
Florence 30 195,950 30 157,270
Maricopa 95 250,000 90 246,500
Queen Creek 230 239,860 230 207,170
San Manuel 25 80,000 15 100,000
Tucson (Saddlebrook) 45 462,500 50 395,000
Pinal County 1,110 $211,500 840 $204,600
City Second Quarter 2006 Second Quarter 2007
Resales Median Price Resales Median Price
Apache Junction 305 $224,450 210 $217,500
Arizona City 65 139,900 45 137,450
Casa Grande 220 179,000 105 177,120
Coolidge 45 123,500 35 108,500
Eloy 40 89,000 30 130,000
Florence 25 170,000 45 170,000
Maricopa 95 256,500 115 219,500
Queen Creek 250 235,000 240 198,000
San Manuel 30 104,000 20 100,000
Tucson (Saddlebrook) 50 370,000 80 382,500
Pinal County 1,180 $211,000 970 $200,000
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