Saturday, February 5, 2011

Phoenix-area housing prices at new low

For more than 18 months, local real-estate analysts believed they had called the bottom of the housing market back in April 2009.

Not anymore, according to Arizona State University professor Karl Guntermann. He reported Wednesday that the median home-sale price in December fell to 3 percent below the previous low point after the housing boom ended in 2006.

December's median price for the Phoenix metro area was just $114,000, compared with $117,500 in April 2009, according to Guntermann's preliminary data.

November's median home price was $122,000, according to the report.

The news came just as national housing economists were reporting that U.S. new-home sale volume in 2010 hit a 47-year low of 321,000 transactions, down more than 14 percent from 375,000 sales the previous year.

In addition to median price, Guntermann tracks what he calls the ASU Repeat Sales Index, which is based on annual changes in the average sale price of a select group of Phoenix-area homes that have sold multiple times, with zero indicating no change from a year earlier.

Just as home values had begun to rise in 2010 before shifting into reverse, the Repeat Sales Index also had crossed over from months in negative territory to positive numbers but is now accelerating back downward, Guntermann said.

The index moved into the positive range in April, indicating price recovery was under way. However, that recovery was short-lived. In August, the index dipped below zero again and is still heading downward, Guntermann said.

The December index, still considered preliminary as of the report's release, was at -8, compared with November's index of -7, and the October index of -6.

"Given the pattern that is emerging, it is likely that declines will continue for at least the next several months," Guntermann said.

However, he noted that the current housing market was far less volatile than it had been.

"To put things in historical perspective, from December 2007 to December 2008, average Phoenix-area home prices dropped 33 percent," Guntermann said. "From December 2008 to December 2009, they dropped another 13 percent."

By that standard, an 8 percent year-over-year drop is an improvement, he said, adding that home prices would likely stabilize by the end of the year.

by J. Craig Anderson The Arizona Republic Jan. 27, 2011 12:00 AM

Phoenix-area housing prices at new low

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