. If you don’t read the newspaper you are uninformed, if you do read the newspaper you are most likely misinformed.
– Mark Twain
Median Phoenix-area home prices reached the $200,000 mark in October, a milestone that comes amid falling buyer demand and an overall cooling of the local market.
An Arizona State University report released today shows October’s median price was 27-percent higher than a year earlier.
But compared with September, it was up by only one-half percent, or $1,000. That indicates the sharp price increases seen earlier this year are continuing to slow down substantially. Last year, for example, the median price climbed 4.6 percent between September and October, according to previous ASU reports.
The chronic supply shortage — one of the market’s biggest challenges earlier this year — is also easing, which is good for buyers and not-so-great for sellers.
There were 40 percent more active listings Valleywide on Oct. 1 — 17,851 — than a year ago, the report said. The Oct. 1 supply figure was also up by nearly 18 percent from Sept. 1.
“The lowest price ranges remain slightly unbalanced with somewhat more buyers than sellers, but the imbalance is now much less severe than in the last two years because the buyers have lost a lot of their former enthusiasm now that prices are so much higher,” Michael Orr, the report’s author and a housing expert at ASU’s W.P. Carey School of Business, said in the report.
Orr predicts the market will end the year in the exact opposite situation in which it began: supply exceeding demand. Even so, supply still is 15 to 20 percent below “normal.”
Despite this bump in supply, overall sales were down, indicating that buyer demand is continuing to wane.
There were more than 7,000 single-family home sales in October — down 1.4 percent from September and 20 percent from a year ago.
“I anticipate sales will be way down in November and through the holidays, when some people even take their homes off the market until late January,” Orr said in a statement today. “We also anticipate a much slower rate of price appreciation in 2014 than the furious pace we have witnessed over the last two years.”
Orr blames the drop in demand on poor consumer confidence and fewer household formations, largely due to the fact that Millenials are living with their parents later in life and are less interested in becoming homeowners.
“When you ask people under 30 whether they want to buy a home, they’re not planning on it like past generations,” Orr said. “Also, demand for starter homes is limited by the difficulty of first-time home buyers in qualifying for loans. Plus, less than 3 percent of the new homes sold in Maricopa County in October were priced below $150,000, so new entry-level homes are getting very scarce.”
Kristena Hansen covers residential and commercial real estate.
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we are at on the a rise of the cycle in Commercial Real Estate. so there is only one way and it’s called we are going up and now is the time for you to expand, upgrade or invest in Commercial Properties in Phoenix. The prices on deals I may get you will not be around forever.
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