Arizona Home Price, Sales Report: Resales Decrease in Pinal County
From a high of 1,785 recorded sales in second quarter 2005, the Pinal County resale market in Arizona has steadily declined to 840 transactions in the first quarter of 2007, compared to 1,110 sales for first quarter 2006 and 1,435 in 2005.
Although year-to-date sales are down, Arizona mortgage activity has followed the traditional path of increasing through the year from 210 sales in January to 345 sales in March. For first quarter 2007, there were 14,185 sales recorded in Maricopa County.
Much like the sales activity, the median price has steadily eroded from $220,000 in fourth quarter 2005 to $204,600 in first quarter 2007, but was up from the $191,500 for the fourth quarter 2006.
The median home price in Pinal County was 78 percent of the median price in Maricopa County ($262,570), while it was 75 percent ($257,000) in the last quarter of 2006. Although the average 30-year mortgage rate was the same as a year ago at 5.8 percent, the declining home prices allowed the monthly mortgage payment for the median price, based on an 85 percent loan-to-value ratio, to decrease from $1,055 to $1,020.
It is $1,310 for the median priced home in Maricopa County.During the first quarter 2007, the median square footage for a resale home in Pinal County was 1,565 square feet, while it was 1,700 square feet in Maricopa County.
While Pinal County has a limited job base and commercial real estate sector, people were willing to drive increasingly longer distances to find affordable housing in Arizona.
“But now, higher gasoline prices and more congested highways have begun to limit the housing market in Pinal County,” said Jay Butler, director of Realty Studies at Arizona State University’s Polytechnic campus.
Because investors were also drawn to the inexpensive housing in Pinal County, higher prices have limited their role in the local housing market significantly. They haven’t been taking out mortgage loans at a very high pace.
“In order to reduce inventories, new home builders have been aggressively pursuing buyers through incentives such as specially priced up-grades, free pools and gift cards. The new home has become a strong competitive and attractive alternative to the resale home in Pinal County,” said Butler. “Thus, there are many reasons for the slowing market and issues that will have to be overcome for any future recovery.”