Scottsdale Real Estate - Phoenix Real Estate
AZ Real Estate News - Price Reductions
February 11, 2008 |
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| Prices on repeat home sales fall 4.6% overall for Valley |
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Kerry Fehr-Snyder
The Arizona Republic
Feb. 10, 2008 12:00 AM
Home prices in several Valley cities are falling at rates not seen since 1990, wiping out equity and making it difficult for those trying to refinance.
Throughout the Valley, prices on repeat home sales fell 4.6 percent overall from October 2006 through October 2007. That compares with an overall decline of 3.8 percent for September 2006 to September 2007.
Unlike other indices that measure median home prices, the Arizona State University-Repeat Sales Index is based on repeat sales.
The data is the most reliable way to estimate price changes in a housing market because repeat sales compare the prices of a house against itself, rather than homes of varying quality, said Karl. L. Guntermann, real-estate professor at W. P. Carey School of Business.
Every city and region dropped into the negative category in terms of rates of change in house prices, demonstrating the severity of the Valley's housing problem.
The best performers were Phoenix and the northeast Valley area of Carefree, Cave Creek, Fountain Hills, Paradise Valley and Scottsdale. Both regions fell at about 1 percent from October 2006 to 0ctober 2007.
In the same period, housing prices dropped 11.1 percent in the Southwest region, a grouping that includes Avondale, Buckeye, Goodyear and Litchfield Park; 9 percent in the Northwest, in the cities El Mirage, Glendale, Peoria, Sun City, Sun City West, Surprise and Youngtown; and 8 percent in the Southeast, which stretches from Tempe through Mesa, Gilbert and Chandler to Apache Junction, Higley, Queen Creek and Sun Lakes.
The real-estate market hit a peak for appreciation in September 2005.
The 4.6 percent decline is the biggest drop in housing prices over a 12-month period since the February 1989 to February 1990 period, when home prices dropped 5.01 percent, during the last real-estate recession.
Guntermann said he cannot predict when the decline will stop or when housing prices will regain their former strength.
"It's not just a matter of too many houses on the market," he said. "It gets into the sub-prime-mortgage problem, affordability, foreclosures, and that has a big impact on people's ability to refinance if their house prices go down 6 to 8 percent. They may not have any equity, and that may create cascading problems."
