the phoenix housing market report
Phoenix home prices were on the rise through 2018
Phoenix home prices were on the rise through 2018 and now into 2019, but the market is one of a couple dozen in the U.S. now considered overvalued, according to the CoreLogic Home Price Index. The latest results, released Tuesday, show home prices in January 2019 were up 6 percent for the Valley, but are still about 15.7 percent below peak home prices hit in 2006. Phoenix was one of the hardest hit during the housing crash included in the Great Recession.
While home prices haven’t recovered to their record highs, the CoreLogic report states about 48 percent of the top 50 U.S. markets are overvalued, including the Phoenix area. That means home prices may be increasing faster than market fundamentals can keep pace.
The report notes that in several markets it is increasingly difficult to find lower-priced housing for entry-level buyers. That has been a problem in Phoenix, which has seen a dearth of properties for sale less than $200,000.
“Entry-level homes have been in particularly short supply, leading to more rapid home-price growth compared with more expensive homes,” said Dr. Frank Nothaft, chief economist for CoreLogic, in a statement.
Phoenix comes in at overvalued despite having a lower year-over-year price increase compared to the 6.6 percent increase seen nationally, according to CoreLogic.
Price increases in the Valley were not enough to keep pace with some of the highest areas in the U.S. for gains, which were Las Vegas at 11.7 percent and San Francisco at 10.2 percent. The Valley was better than places such as Houston, at 3.8 percent and Miami at 3.6 percent.
As a state, Arizona saw price gains of 6.4 percent from January 2018 to January 2019. It was among the lowest price gains in the West. Nevada saw price gains of 11.3 percent over the same time, Idaho was at 10.3 percent, Washington hit 12.1 percent, and Utah was at 10.8 percent for the 12-month period.
By Patrick O’Grady – Managing Editor, Phoenix Business Journal
Homes in Phoenix Are Worth 16% Less than that of 13 Years Ago.
As the nation’s housing market prices recover to pre-recession levels, those findings come from a report by CoreLogic looking at state by state and national market recovery.
Tina Tamboer, an analyst for the Cromford Report, said current Arizona market conditions are favorable and nothing to worry about..
Most of the country’s housing markets peaked before falling into deep decline around 2006, including Phoenix. Nationally, the market has recovered since dropping 33 percent during the recession, and hitting a bottom in 2011. U.S. housing prices are 1 percent above the 2006 peak.
“Homeowners in the United States experienced a run-up in prices from the early 2000s to 2006, and then saw the trend reverse with steady declines through 2011,” Dr. Frank Nothaft, chief economist for CoreLogic, said in a statement. “Greater demand and lower supply – as well as booming job markets – have given some of the hardest-hit housing markets a boost in home prices. Yet, many are still not back to pre-crash levels.”
Arizona joins the ranks of other states such as Florida, Illinois and Nevada in not reaching pre-crash levels. It saw its own peak in June 2006, before plunging 51 percent from peak to trough, one of the largest drops in the country. Arizona has seen a 70 percent increase from its trough point but, the market is still 16 percent lower than its peak prices.
According to Zillow’s home value index, the average Arizona home price is currently $233,400. For Maricopa County, the median home value is $254,600.
When accounting for inflation, Tamboer said the market is right on track to where it would be had there not been a price spike, followed by the crash. She said most Phoenix-area markets are currently around 20 percent below peak prices.
She expects prices to keep rising, making now a good time to both buy and sell. She said locally, median house prices at the end of last year were around $245,000.
She said current market conditions are in favor of sellers, especially with houses on the market under $300,000. She added these are likely to be competitive and get several offers.
For buyers with prices rising she cautioned that holding off will likely lead to getting a smaller house for your money. Each year a buyer holds off with current rates they could be losing 50 square feet for the same price.
Credits: By Kara Carlson – Editorial Intern, Phoenix Business Journal
Mar 1, 2018, 6:00am