I gotta go look at the raw data at The Cromford Report, but this looks worse than I expected. I thought Phoenix home prices would likely fall July through January but I didn’t think we would test the April 2009 lows.
From my July post;
I worry about two things; 1) the $8,000 first-time home buyer tax credit has ended, and 2) we are going into the weaker half of the year for home sales and prices.
So, if we were going to see any final home price declines in metro Phoenix in this cycle, I bet it would occur in the next six months. (As always, I’m not taking about all zip codes. Some high priced zip codes could continue falling into 2011.)
But maybe all the commenters on this blog who’ve said we’re in for a double dip in Phoenix real estate will turn out to be right.
If we significantly break the April 2009 median home price, we will have a “double dip.” If, however, we only get close to the April 2009 lows, I would say we are “bouncing along the bottom.” I guess it depends on your definition of “double dip.”
Blurbs from, “Arizona real estate: Phoenix home prices down; Indicators forecasting housing ‘double dip’” the front page article in Sunday’s Arizona Republic
“The market is much weaker now than it was a few months ago, with demand down severely almost everywhere.”
The index shows metro Phoenix’s median home price falling from $128,000 in July to $125,000 this month to $120,000 in September. A slight recovery is expected for October, to $123,000.
Pre-foreclosures rose 34 percent in July.
“If you aren’t selling an inexpensive home, it can be tough to sell in this market.”
There are 43,000 homes listed for sale in the region, up from 41,500 in June and 37,000 a year ago.
“It’s just that there are now far fewer buyers and far more sellers than at this time last year,” Orr said. “It’s too early to say whether the current setback will be mild, moderate or severe, but there are no encouraging signs in the data from August so far.”
Epilogue
I just checked The Cromford Report and really the only thing that looks unusually bad in the Phoenix residential real estate market is the pending home sales and I think that is largely just a hangover from the $8,000 tax credit party.
When the original tax credit ended in November 2009, we only had a one month hangover but that’s because January is the start of the high season.
This time the party was bigger and the hangover worse. This time when the party ended (more or less June 30), we were headed into the slower part of the year for Phoenix area home sales so the hangover is lingering on. We didn’t have a January burst of activity to wake up the market.
And even if prices do test the April 2009 lows, I don’t know if it’s really a “double dip” or just “bouncing along the bottom.”
UPDATE: Graph showing home Phoenix median home price is expected to be pretty much flat after a dip following the end of the $8,000 tax credit.