Dr. Karl Guntermann at ASU just updated his Repeat Sale Index through January 2009.

Click graph

(The graph above was created by John Wake of HomeSmart using ASU data. The graph is not included in Guntermann’s report.)

As he reads the preliminary numbers, home prices could slump to $121,000 in February and $120,000 in March, which would push prices back to the level of April and March 1999, respectively.

“Markets over-react,” says Guntermann. “Optimism pushed prices well above the long-term trend line for appreciation, and when the market corrects, like it is doing, it goes too far in the other direction.”

Unlike most popular indices, such as those developed by the National Association of Realtors that measure median home prices, the ASU-RSI index is based on repeat sales. The use of repeat sales data for the same house is considered the most reliable way to estimate price changes in a housing market, says Guntermann…

Pinch Me

To have an ASU professor say, in essence, that Phoenix home prices are too low, is a bit of a shock for me. It demonstrates just how much the housing market in Phoenix Arizona has changed.