(See recent posts on Phoenix Case-Shiller Home Price Index.)
The most obvious story that comes out by looking at the new low, middle and high priced homes indexes for Phoenix is how the least expensive third of homes continued to appreciate for several months after the middle and higher priced homes started to peak.
The middle and high priced homes lost most upward momentum in October/November of 2005.
The low priced homes continued appreciating strongly as home buyers shifted toward less expensive homes after buyers were priced out of more expensive homes. The low priced homes peaked in the summer of 2006 and started falling at a rate similar to the middle and high priced homes.
Does this mean there is a bit more downside potential for low priced homes? Or will low priced homes continue to stay in demand because many buyers can’t afford higher priced homes.
The three breakpoints were for August 2007. For Phoenix, the Case-Shiller Index classifies the Low Tier as under $222,922, the Middle Tier as $222,922 to $318,061, and the High Tier as over $318,061.
The data published today by Standard & Poor’s includes a low price housing series, a middle price housing series and a high price housing series for 17 of the 20 metropolitan areas currently covered by the index family. Each tier represents approximately one-third of the number of sales transactions recorded in each respective market. For example, for each market, Standard & Poor’s defines low, medium and high by defining breakpoints in one- third intervals for all sales found at each point in time. The methodology looks at the first sale in a given sale pair to define the price level.