Too few home buyers in October translated to another tepid month for metro Phoenix’s housing market. A flat Housing market.
Home prices and sales were basically flat during the month, while houses listed for sale climbed, according to a report released today from Arizona State University’s W. P. Carey School of Business.
“We’ve seen very little change in the greater Phoenix housing market for the last year, and stability is the order of the day,” said Mike Orr, director of the Center for Real Estate Theory and Practice at W. P. Carey. “There is no longer any real upward price momentum.”
This year’s housing slowdown comes after near record sales and a 75-percent increase in Valley home prices during 2012-13.
Metro Phoenix’s median sales price was $208,000 in October, down 1 percent from September’s median of $209,900.
Valley home prices have yet to recover from the crash. The area’s median home price reached a high of $267,000 in September 2006, and a low of $117,000 in September 2011.
During October, 6,749 houses sold across the Phoenix area. That’s up 1 percent from the 6,655 Valley home sales recorded in September.
At the beginning of November, 25,953 Valley houses were listed for sale. That’s up 6 percent from Oct. 1, according to the Arizona Regional Multiple Listing Service.
Orr doesn’t expect the region’s home sales or prices will jump again this year.
“The big economic gains of the last few years have helped companies, but not necessarily the average person who might consider taking out a home loan,” he said.
After the housing crash, Phoenix-area home prices shot up from September 2011 to summer 2013. Then, the median single-family-home price rose just 4 percent more – from $200,000 to $208,000 – from last October to this October, the report stated.
“We’ve seen very little change in the Greater Phoenix housing market for the last year, and stability is the order of the day,” says the report’s author, Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business.
“Price increases look tame over the last 12 months and even tamer if you examine just the last six months. There is no longer any real upward price momentum greater than the general level of inflation.”
Orr’s report notes that demand in the market remains lower than last year. Activity from first-time home buyers has been unusually low, in part because some people had their credit badly damaged during the housing crash and also because millennials are waiting to enter the home market until later in life than previous generations.
These are also reasons the rental market is strong. Rents have increased 3.7 percent over the last 12 months in the Phoenix area, according to the report.
Valley foreclosures have dropped dramatically over the past year. Completed foreclosures of single-family and condo homes were down 19 percent from last October to this October.
The report also noted the percentage of residential properties bought by investors hit 15.5 percent, the highest level since May, but still well below last year’s levels.
“Investors and out-of-state buyers are showing a small recovery in buying interest, but to get our market back to what we would consider normal will still require a major increase in demand from local first-time home buyers,” explains Orr.
Orr added the market share for new-home sales is doing better and has recovered to 14 percent – the same level as October 2013. Taylor Morrison, Pulte Homes and Meritage Homes are leading the way in the Phoenix area.