Greater Phoenix home sales
Here is Professor Jay Butler’s latest press release on home sales in Greater Phoenix.
Many reporters use the information as the basis of their reports on home sales. For years I graphed Butler’s home sale data. The graphs tell a much clearer story than just listing prices.
If you are a real estate agent, investor or homeowner and you would like to see what all those stories are based on, click the first link in this post.
In August 2008, there were a total of 7,505 recorded resale home transactions. Foreclosure activity represented 44 percent
ASU Repeat Sales Index
The other ASU housing report that comes out monthly is the newish Repeat Sales Index for Phoenix. It is similar to the Case-Shiller Housing Index but with more detailed breakouts of data.
Guntermann used median housing prices from 1989 to 2003, and that produced a trend line in a graph that sloped upward at moderate angle. The trend was then projected, as if conditions had been ‘normal,’ through 2009. For example, if the median price for a home was $75,000 in 1989 then it should have risen to about $200,000 by 2009.
Guntermann overlaid the trend line with one showing actual Phoenix house prices over the period 1989 through June 2008. In comparison, the two lines more or less overlapped until 2004 when actual home prices diverged dramatically, accelerating into higher prices ranges at a steep angle. Median home prices for the Phoenix metro peaked in June 2006 at approximately $262,000.
By mid-2007, actual Phoenix home prices began slipping. On the graph this shows up as a steep slope equal to the one illustrating home price rises in 2004 and 2005. In June 2008, median home prices dropped to approximately $210,000, still above the trend line, which was at $190,000 for the same month.
Guntermann expects the median home price trend line and actual Phoenix house price movement to graphically intersect late in 2008 or early 2009, which, he says is approximately where house prices would have been without the big run-up in 2004 and 2005.
The drop in actual home prices won’t necessarily stop when it hits the median home price trend line, but could overshoot it, Guntermann cautions. Even if that happens, home prices would eventually get back close to the long-term trend.
“If the economy is weak and if financing remains a problem,” Guntermann adds, “that could cause actual home prices to fall below the median home price trend line, at least temporarily.” [Emphasis is mine.]
However, the new best-performing city is now Tempe, which was off just 13.2 percent from June 2007 to June 2008 — better than Scottsdale/Paradise Valley. In addition, it was the only Phoenix metro city that did better than the month before, when Tempe home prices shifted down 14.7 percent from May 2007 to May 2008.