Are 2010 Phoenix Home Prices Holding Up?

During the past month Phoenix home prices have slipped slightly but they are still way above the low in March 2009. As I have said in previous posts this is not unusual and the Phoenix home market will not rebound on a straight line up but rather “zig zag” on its rocky road to recovery. Last week the average per square foot price for a home in Phoenix fell to $89. That’s down about 4% from the previous month square foot price of $92. The low for the Phoenix metro area was recorded Spring of 2009 and hit $82 per square foot. Pending sales forcasts show us we might have another small drop next month. Several reasons account for the Summer downturn of which one is the increase of short sale activity. Last month 28% of the areas sales where short sales. Although short sales typically are better for the market than foreclosures they still help in holding the market down. Resold foreclosure home prices have fallen almost 7% in the last 30 days, probably because we have a higher inventory of bank owned foreclosed homes on the market right now. Another reason for the drop is traditional home sales (not short sale or foreclosure sales) have dropped nearly 30% in the last month. The federal home buyer tax credit that has expired is also a big reason for the decline and we saw, and expected this. Last but not least the new Arizona immigration law (SB1070) could be having an effect on our housing market. Again, in my opinion, we will continue to see this up/down housing market action for the next 12 – 18 months and then start to gradually see an upturn in this market. I do not have a crystal ball and will be very curious to see as the months go by if my predictions come true! If you are in the market for Phoenix investment property, a second Winter home or any real estate in the Phoenix metro area please don’t hesitate to contact us, we’re here to help or answer any questions you may have.