Arizona Housing Prices Plumment; Prime Time to Buy
Arizona home prices officially fell into the red last quarter, the first time that has happened in 16 years.
New figures Thursday from the federal Office of Housing Enterprise Oversight show that home values in the state dropped nearly three-tenths of a percent in the second quarter of this year compared to the prior quarter. The last time the state dipped into negative numbers was in 1991.
Tucson home prices dropped 0.07 percent in the second quarter.
Overall, the normally booming Arizona housing market is so cold that prices could not even keep pace with the national average, which actually went up a tenth of a percent in the same period. And that figure was the smallest hike since 1994.
Put in real dollars, that decline means a home that was valued at $200,000 three months earlier now is worth $580 less.
“Now is the ideal time to buy because we are seeing prices lower than they have been in a long time,” said John Strobeck, owner of the Tucson based Bright Future Business Consultants. “They won’t stay as low as they are now. … I would say that within a year we will see prices inch back upward.”
Noy Kelly, a real estate agent for Long Realty in the Tucson area, agrees that this is an opportune time to buy a home.
“We are in an area where economically it makes more sense to have homes become lower in value pricewise so people can still afford them,” Kelly said. “This will have a large impact and will help turn the market into a safer place for people to buy homes.”
Strobeck said the decrease in prices makes perfect sense.
“We see prices being pushed downward because demand is low,” he said. “It is low because everyone bought homes in 2005 and at that time, investors came into the market and pushed prices way up. What we are doing now is adjusting back to where we should be.”
The statistics reflect how much the values of existing homes have gone up — or down. The agency tracks average price changes in repeat sales and mortgage refinancing of the same single family properties, using statistics from mortgage transactions.
As bad as these statistics are, the numbers could get worse.
James Lockhart, the agency’s director, said the new report reflects prices only through June. He said the more recent instability in the Arizona mortgage market could affect housing prices, with the results showing up in the third-quarter figures that will be released at the end of November.
Even with the quarterly decline, the state did manage to post a 2.2 percent increase in home prices over the same period a year earlier.
SOURCE: The Arizona Daily Star