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Phoenix home sales continue on downward trend
By Melissa Wirkus
The housing
market is experiencing a downturn
pretty much across the entire United
States, with some areas of course
being affected worse than others.
Young cities, which experienced tremendous
growth in a short amount of time,
seem to be the ones that are getting
hit the hardest by the slowdown.
This means these types of cities are
seeing prices drop the most and homes
sales slow down dramatically. One
such city is Phoenix, which is having
a bit of trouble bouncing back from
the slowdown, especially in terms
of sales.
An October 10, 2006 article from Arizona
State University, “Greater Phoenix
resale market continues slowing trend
in September,” discusses how
this desert town has hit a real dry
patch.
Phoenix has been one of the fastest
growing cities in the United States
during the past couple of years.
New towns, suburbs and sub-divisions
have cropped up at an alarming pace,
further elongating this already spread-out
city.
But now, as the housing market has
slowed down, residents of the greater
Phoenix area are finding it quite
difficult to sell their homes.
In fact, sales have slowed quite dramatically.
“In September 2005, the local
resale home market began to slow down
with 9,815 recorded sales leading
to 4,875 recorded sales in September
2006. This is the lowest monthly level
since 4,090 sales were reported in
February 2003, and the lowest September
since 2000, with 4,134 sales. So far
in 2006, there have been a total of
52,390 sales, while it stood at 88,750
sales in 2005 year to date. While
it was very unlikely that the market
could have sustained the level of
2005, the current level of activity
is very comparable to that recorded
in the years of 2003 year to date,
with 55,435 sales.”
In addition to all of this, Phoenix
also experienced a year over year
decline in the median price of a home.
Last year this price was $263,000
and it declined to $256,000.
The problem with getting data for
Phoenix is that it can be largely
skewed since the area is so big.
“Since the Greater Phoenix area
is so large, the median price can
range significantly from $678,000
($661,000 in August) in North Scottsdale
to $159,500 ($120,500 in August) in
the Sky Harbor area of the city of
Phoenix.”
Rising mortgage interest rates and
a variety of other factors are also
causing people to be worried about
a looming increase in foreclosures
because people can no longer afford
their homes.
“‘Even though mortgage
interest rates have been declining
for the last few months, limited home
appreciation and household income
continues to raise concern about the
ability of some homeowners to maintain
their homes,’ said Jay Q. Butler,
director of the Arizona Real Estate
Center at Arizona State University's
Polytechnic campus. ‘This may
be especially evident for those that
have used some of the more creative
financing
instruments, such as option payment
plans and initially low interest rate
adjustable mortgages.’”
Residents of the greater Phoenix areas
are just going to have to manage their
mortgages and try a little harder
to sell in order to survive in today’s
housing market.