March is typically an indicator for the coming resale home season, and with 4,335 recorded sales it’s showing signs of a continuing weak market. Even though it is an improvement over the 3,750 sales of February, it is significantly below last year’s 5,385 sales and is the lowest March since 1996, with 3,270 sales.
Hmmm. I was thinking 2007 would be the low for the number of home sales. Now it’s looking more and more like it will be 2008.
Unfortunately, there is increasing data, such as job losses and layoffs, that the economy is now weakening and will add further stress for the housing markets
Jay has the median home price for Greater Phoenix at $220,000 for March 2008, the same as the month before. Last year it was $265,470 for March.
Click below to read full press release from ASU.
For Immediate Release
Wednesday, April 9, 2008
Greater Phoenix resale numbers for March spring back to 1996
MESA, Ariz. – March is typically an indicator for the coming resale home
season, and with 4,335 recorded sales it’s showing signs of a continuing
weak market. Even though it is an improvement over the 3,750 sales of
February, it is significantly below last year’s 5,385 sales and is the
lowest March since 1996, with 3,270 sales.
Although the year has been continually improving since January (3,350
sales), the year-to-date total of 11,395 sales is below last year’s
While there are many problems rising out of the hyper-resale market,
many households were able to acquire homes with traditional financing,
according to Jay Q. Butler, director of Realty Studies in the Morrison
School of Management and Agribusiness at Arizona State University’s
“People who settled in their dream homes with manageable mortgage
payments have little incentive or pent-up demand to change their housing
investment. Thus, lower sales activity should not be unexpected,” he
“During the last year, the housing market has been confronting issues
derived from the hyper-market of previous years such as the subprime
meltdown and overly ambitious investors. Unfortunately, there is
increasing data, such as job losses and layoffs, that the economy is now
weakening and will add further stress for the housing markets,” added
While there has been little attempt to help investors, there have been
many programs started to help people save their homeownership. Most of
the attempts have dealt with reset of higher interest rates, with the
basic premise being that the home occupant has the income but not enough
to satisfy the new mortgage payment. In a weak economy, many households
now will not have the needed income to save their homes, even with a new
mortgage payment plan.
Further, with increased energy and food costs, there is added strain on
the household budget. Thus, the potential economic downturn and
inflationary pressures will define how much further the housing market
will worsen and when recovery will begin.
The median home price remained stable at $220,000, in contrast to last
year’s $265,470. The lower median price is being driven by several
forces including the large number of vacant homes, especially in certain
Further, capital is available for lower-priced housing, but lacking in
the higher priced housing market. The recent rise in the FHA limit from
$271,050 to $346,250 will help some move-up market activity. However,
the non-conforming limit is expected to remain at $417,000, which will
be of little assistance to the higher priced market.
Last year, 39 percent of the resale homes sold for more than $300,000,
while it was 27 percent for March 2008. Homes selling for under $200,000
have increased from last year’s 16 percent to a current 40 percent of
the local resale housing market. The most evident impact of lower prices
is improved affordability.
Even though mortgage interest rates increased from last year’s 5.8 to
5.9 percent, the much lower sales price allowed the monthly payment to
decline from $1,325 to $1,110. While improving affordability based on
lower home prices can greatly benefit buyers, it adversely impacts many
owners and potential sellers whom are watching their limited equity
erode, as prices decline to and even below existing debt level.
“The lower prices affect the ability and desire to continue owning the
home and even overall confidence in the economy, which puts additional
strain on the local housing market,” said Butler.
Changes in median prices can vary tremendously throughout the Valley.
For the western suburbs the median price has fallen 21.2 percent from
last year’s $231,000 to $182,125, while South Tempe moved down 9.7
percent ($291,000 to $262,500). Since the greater Phoenix area is so
large, the median price can range significantly from $605,000 ($573,570
in February) in North Scottsdale to $148,800 ($157,700 in February) in
the Maryvale area of the city of Phoenix.
With 685 recorded sales, the townhouse/condominium market improved from
the 620 sales of February, but was well below last year’s 1,350
transactions. The median home price decreased from $174,500 in January
2007 to remain at $165,000, while it was $181,000 a year ago. The
underlying reasons for the fairly stable price can run the gamut from
the return of the seasonal visitor and international investors to new
households satisfying their initial housing needs.
The median square footage for a single-family home recorded sold in
March 2008 was 1,770 square feet, which is larger than the 1,700 square
feet for a year ago. In the townhouse/condominium sector, the median
square footage was 1,160 square feet, which is larger than the 1,120
square feet reported a year ago.
* In contrast to March 2007, recorded sales in the city of Phoenix
decreased from 1,450 sales to 1,075, while the median sales price
decreased to $185,455 from $228,000. Since Phoenix is a geographically
large city, the median prices can range significantly such as $148,800
($157,700 in February) in the Maryvale area to $263,500 ($260,000 in
February) in the Union Hills area. The townhouse/condominium sector
decreased from 400 to 195 sales and the median price decreased from
$165,000 to $149,000.
* The Scottsdale resale home market declined from 465 to 305
recorded sales, with the median sales price decreasing from last year’s
$635,000 to $525,000. The median resale home price is $605,000 ($573,570
in February) in North Scottsdale and $260,000 ($254,000 in February) in
South Scottsdale. The townhouse/condominium sector in Scottsdale
decreased from 280 to 155 sales, and the median sales price decreased
from $265,950 to $236,750.
* The Mesa resale housing market declined from 620 sales a year
ago to 450, while the median price fell from $242,700 to $200,000
($208,750 in February). The townhouse/condominium sector also fell from
190 to 90 sales, while the median home price decreased from $158,400 to
* Glendale decreased from 355 to 260 sales, and the median sales
price decreased from $248,250 a year ago to $209,750 ($202,000 in
February). The townhouse/condominium sector decreased from 50 to 15
sales, while the median sales price increased from $148,850 to $155,000.
* For the city of Peoria, the resale market declined from 255 to
190 sales, while the median price moved from $270,000 to $235,900
($225,300 in February). The townhouse/condominium sector decreased from
35 to 20 sales, while the median price increased from $165,000 to
* In comparison to a year ago, the Sun City resale market declined
from 150 to 100 sales, while the median sales price decreased to
$182,500 from $200,000. Resale activity in Sun City West decreased from
at 70 to 60 sales, and the median sales price decreased from $217,450 to
$214,000. The townhouse/condominium market in Sun City decreased from 75
to 65 recorded sales, while the median home price decreased from
$131,000 to $119,900. In Sun City West, activity stayed at 25 sales and
the median sales price decreased from $190,000 to $130,970.
* The resale market in Gilbert increased from 290 to 295 sales,
and the median sales price decreased from $295,500 to $245,000 ($254,700
in February). The townhouse/condominium market declined from 15 to10
sales, as the median sales price decreased from $200,000 to $176,450.
* For the city of Chandler, the resale market declined from 380 to
325 recorded sales, with the median sales price decreasing from $293,850
to $234,000 ($245,000 in February). The townhouse/condominium market
declined from 65 to 20 sales, and the median sales price went from
$170,000 to $145,000.
* The resale market in Tempe decreased from 125 to 100 sales, with
the median sales price decreasing from $278,750 to $237,000 ($240,000 in
February). The townhouse/condominium sector fell from 95 to 35 sales,
and the median sales price decreased from $198,500 to $160,000.
* The highest median sales price was in Paradise Valley at
$1,750,000 with a median square foot house of 3,995 square feet.
* In the West Valley, the following communities represent 14
percent of the resale market.
o Avondale decreased from 100 to 90 sales, with the median price
moving from $232,280 to $185,130 ($194,570 in February).
o El Mirage increased from 40 to 60 sales, while the median home
price went from $213,750 to $146,900 ($149,500 in February).
o Goodyear went from 105 to 125 sales, while the median price
decreased from $255,000 to $220,000 ($220,490 in February).
o Surprise improved 250 to 285 sales, but the median price went
from $241,500 to $205,000 ($213,740 in February).
Realty Studies is associated with the Morrison School of Management and
Agribusiness at Arizona State University’s Polytechnic campus. Realty
Studies collects and analyzes data concerning real estate in the greater
Phoenix metropolitan area. Realty Studies is a comprehensive and
objective source of real estate information for private, public and
governmental agencies. Its director, Dr. Jay Q. Butler, may be reached
at (480) 727-1300 or e-mail him at Jay.Butler@asu.edu. To subscribe to
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