Over the past six years, housing has been badly battered. Some people thought it might be a decade before there would be signs of life in the market.
There appears to be some good news in the Phoenix area, according to Arizona State University W. P. Carey School of Business. In July, the latest data for Maricopa and Pinal counties shows median single-family-home prices rising more than 30% since July one year ago. The two best markets are for townhomes and the luxury market.
Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business says the lowest point in the Phoenix area was exactly two years ago, September 2011.
There has been activity in the market, especially with investors. As the supply of townhomes and condos started to dry up, prices rose up to 50%
“The Greater Phoenix housing market has been dominated by supply constraints for the last two years. The shortage has applied to both houses and townhomes for purchase, as well as homes for lease, but it is most severe for low-priced homes for sale.” – report author, Mike Orr
After Christmas, prices started to rise, but the market went flat over the summer. Now as the weather cools, prices are edging upwards.
The number of foreclosures is on the way down, as are the number of investor purchases.
The Business School’s report says:
Investor purchases represent a falling share of the market, having already dropped from a peak of 39.7 percent last July to 27 percent this July. Owner-occupiers are gaining more share, as investors look for bargains in other parts of the country. Arizona residents are gaining market share, with out-of-state purchasers completing only 18 percent of this July’s transactions in Maricopa County, the lowest percentage since February 2009. Financed transactions are gradually replacing all-cash transactions. Demand is falling to be more balanced with the low existing supply, and supply is gradually rising.
Orr’s full report, including statistics, charts and a breakdown by different areas of the Valley, can be viewed and downloaded from their website. A podcast with more analysis from Orr is embedded here, and is also available from knowWPCarey, the business school’s online resource and newsletter.