Arizona Mortgage Activity Falters Across Grand Canyon State
An analysis of home sales in Wickenburg, Arizona, over the past few years indicates that while sales have slowed, home prices for properties on the market remain relatively high, according to the Wickenburg Sun.
Data indicates that the price per square foot of the average home sold went from $116 to $185 or an increase of 56 percent. The rate of increase was greatest between 2003-2004 and is now slowing down.
Probably more significant for those in the Arizona mortgage business is the number of homes sold in that time. That number increased to a high point of 288 during 2005 and now has significantly slowed.
“The selling frenzy has stopped,” said Tadd Nixon, owner of TAN Appraisal Services. “While values have not significantly dropped, the number of homes being sold has drastically decreased.”
“This year we are only doing about half the number of home appraisals as last year. The time on market figure hasn’t yet reflected this slowdown because many of the homes now on the market have been there for a while, but the statistics don’t change until they sell,” he said.
Nixon attributed the rapid increase and present slowdown in the market to multiple factors affecting both Wickenburg and Arizona as a whole. He called the housing boom a rolling boom having started in California and traveling to many other hot spots of the country.
Traditionally Arizona has had relatively cheap land keeping prices down, but that changed in 2004. Aggregate real estate values quickly increased in Phoenix, with Wickenburg following to a certain extent.
As many local developments sold out, land prices rapidly increased caused by the land shortage.
This fact, along with the sharp increase in the cost of building materials, helped push the costs of both property and mortgage loans through the roof in the Grand Canyon State.
According to Nixon, the Phoenix housing market has experienced a sharp slowdown, which has been felt in Wickenburg, alebit to a lesser extent. While prices have not statistically fallen much in Phoenix, he expects that to happen since the rate of foreclosures is up sharply.
With sales off in Wickenburg, he expects to see this market also soften somewhat in price.
“High raw land prices are keeping the market up at the present time,” Nixon said. “We have several developments about to come on line, and when that happens we will see more available lots and can expect lot prices to level off or even drop a little. Generally the Wickenburg market moves in the same direction as Phoenix but a little later in time and a little less severe in the amount of change.”