Greater Phoenix Housing Market Strengthens in March
In the Arizona housing market, and nationally, March generally tends to be the first month that shows an improvement in a given calendar year, and the beginning of the resale season.
- With 5,385 sales, March in the Greater Phoenix housing market did show some improvement over January (4,520 sales) and February (4,280 sales).
- It was the strongest month since 5,685 were recorded in August 2006 and 5,040 sales in November, showing that there’s some Phoenix home loan demand left yet.
- Thus, March showed all the indicators of a traditional March and further supported the idea that the market has returned to its historical pattern.
- However, it was well below the 7,265 sales of March 2006 and 10,035 sales of March 2005, but comparable to the 5,340 sales of March 2002.
So far in 2007, with Arizona mortgage rates remaining low, a grand total of 14,185 homes have been recorded sold, in contrast to 17,980 for 2006 year to date and 27,325 sales for 2005 year to date.
“While the market is tracking near historical norms, the levels should be well below those of the last few years, because the current market lacks the market frenzy to own and/or invest at almost any price and reasoning,” said Jay Butler, director of Realty Studies at Arizona State University’s Polytechnic campus.
“The general expectation is that the 2007 resale housing market should be a good year, but no where near the records, assuming that there are no negative political events and that the sub-prime problem remains fairly contained.”
Much like the ever increasing sales activity of the last few years, the rapid improvement in Arizona home prices has disappeared.
The median home price in March was $265,470, in comparison to $260,000 for February and last year’s $263,000.
For March 2007, 15 percent of all recorded sales were for homes priced from $125,000 to $199,999, 42 percent for $200,000 to $299,999 and 40 percent for homes priced more than $300,000.
Last year, the distribution was 17 percent of all recorded sales were for homes priced from $125,000 to $199,999, 43 percent for $200,000 to $299,999 and 39 percent for homes priced more than $300,000.
The increase in the higher price levels demonstrates how the importance of the move-up market emerges in a slowing market. Since suburban Phoenix is so large, the median price can range significantly from $713,500 ($687,500 in February) in North Scottsdale to $150,000 ($139,500 in February) in the Sky Harbor area of the city of Phoenix.
At 5.8 percent, mortgage rates are basically unchanged from 12 months ago and although home prices rose slightly, the monthly payment increased slightly from last year’s $1,310 to $1,325.
Even though mortgage interest rates have been declining for the last few months, limited home appreciation and household income continues to raise concern about the ability of some homeowners to maintain their homes.
These concerns have been mounting as the problems of the sub-prime [bad credit mortgage] market and nontraditional financing become more evident.
Because condo units are popular with seasonal visitors, it is not unusual to observe an improvement in the early months of the year. Thus, March had 1,350 sales, in comparison to 1,050 for February and 1,750 sales for a year ago. The median home price increased from $175,000 in February to a record $181,000.
Continue reading this article published by Arizona State University …