Greater Phoenix Resale Numbers
Arizona Real Estate Center Reports May 2006 Resale Home Market Activity
Friday, June 9, 2006
MESA, Ariz. - Historically, resale housing activity in May triggers a
series of good levels through August. May 2006 had 6,870 recorded sales,
which is slightly below the highest level for 2006 at 7,265 sales in March.
While May 2006 produced a good level of activity, it was well below the
10,425 sales of a year ago and the lowest level since May 2003 (5,890
recorded sales). So far in 2006, there have been a total of 30,830 sales,
while it stood at 46,485 sales in 2005 year to date. While it is 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 (27,000 sales) and 2004 year to date (36,555 sales).
The primary news of the last year's housing market was the rapid rise in
the median home price from $194,000 in January to $260,000 in
December. However, since the $263,000 median price was set in
September 2005, the aggressive growth rate has been disappearing with
the median being up slightly to $265,000 in May, while it was $264,900 in
April 2006 and $235,000 for a year ago.
As the housing market slows, the entry-level sector basically disappears,
while the move-up market garners a larger share of the remaining
activity. Thus, it is not unusual to see median prices stabilize or even
increase as the move-up market works to be satisfied. For May 2006, 14
percent of all recorded sales were for homes priced from $125,000 to
$199,999, 44 percent for $200,000 to $299,999 and 39 percent for homes
priced over $300,000.
Along with a higher median home price, mortgage interest rates are
higher than a year ago. Thus, affordability continues to be an issue. The
average 30-year mortgage for May 2005 was 5.5 percent, while it was 6.2
percent for May 2006. Based on an 85 percent loan-to-value, the monthly
mortgage payment for the median price home increased from $1,135 to
$1,380. Since the greater Phoenix area is so large, the median price can
range significantly from $700,000 ($663,750 in April) in North Scottsdale
to $150,000 ($147,500 in April) in the Sky Harbor area of the city of
Phoenix.
"When purchasing a home for investment or occupancy, the rapid
growth in price that was so evident in much of 2005 is somewhat
soothing to the uncertainty of the buying decision," said Jay Q. Butler,
director of the Arizona Real Estate Center at ASU's Polytechnic campus.
"If home prices continue to be stable or even decline in some areas,
potential buyers may be increasingly reluctant to make the purchasing
decision, because future appreciation is much more uncertain. Further,
current owners, especially investors, may want to bring homes to a good
market in order to lock any current appreciation."
With interest rates, especially short-term ones, continuing to increase and
stable home appreciation, there is increasing concern about the ability of
some homeowners to maintain their homes. 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.
Over the last few years, the townhouse/condominium market has had
increased popularity for owner-occupancy, especially for young and
minority households, and investors. Sales activity followed a pattern
similar to the single family market, with an increase from 1,390 sales for
April 2006 to 1,470 sales for May, which was below last year's 2,055 sales.
So far in 2006, there have been 7,090 sales, while there were 8,800 sales a
year ago. Further, the median home price has remained unchanged from
April at $175,000, while it was $143,500 for a year ago.
The median square footage for a single-family home recorded sold in
May 2006 was 1,625 square feet, which is smaller than the 1,655 square
feet reported a year ago. In the townhouse/condominium sector, the
median square footage was 1,100 square feet, which is smaller than 1,135
square feet reported a year ago.
- In contrast to May 2005, recorded sales in the city of Phoenix
decreased from 2,830 sales to 2,120 sales. The median sales price
increased from $220,000 in April 2006 to $225,000, while it was
$180,450 a year ago. Since Phoenix is a geographically large city, the
median prices can range significantly such as $150,000 in the Sky
Harbor area to $330,000 in the Union Hills area. The
townhouse/condominium sector decreased from 625 to 465 sales,
while the median price increased from $116,000 to $153,700.
- While the Scottsdale resale home market declined from 865 a year ago
to 535 recorded sales, the median sales price continued its upward
movement by increasing from $527,750 to $615,000, while it was
$593,000 in April 2006. The median resale home price is $700,000
($663,750 in April) in North Scottsdale and $329,250 ($320,000 in
April) in South Scottsdale. The townhouse/condominium sector in
Scottsdale also decreased from 445 to 305 sales, but the median sales
price increased from $245,000 to $261,500.
- The Mesa resale housing market declined from 1,205 to 790 sales,
while the median price increased from $213,000 to $249,950 ($245,900
in April). The townhouse/condominium sector also fell from 290 to
225 sales, while the median home price increased from $115,000 to
$157,000.
- Glendale decreased from 800 to 575 sales, but the median sales price
increased from $215,000 to $250,000 ($250,000 in April).The
townhouse/condominium sector also declined from 95 to 80 sales,
while the median sales price increased from $94,750 to $148,500.
- For the city of Peoria, the resale market fell from 445 sales to 305
sales, while the median price moved from $238,000 to $284,950
($275,500 in April). The townhouse/condominium sector slowed from
60 to 50 sales and the median price went from $134,900 to $175,000.
- In comparison to a year ago, the Sun City resale market fell from 200
to 120 sales, the median sales price increased to $220,000 from
$188,000. Resale activity in Sun City West also fell from 110 to 45
sales, but the median sales price increased from $222,000 to
$259,000.The townhouse/condominium market in Sun City declined
from 125 to 75 recorded sales, while the median home price increased
from $120,000 to $149,000. In Sun City West, activity fell from 35 to 10
sales, but the median sales price increased from $165,000 to $172,950.
- The resale market in Gilbert decreased from 605 to 340 sales, but the
median sales price increased from $285,000 to $327,450 ($339,000 in
April). The townhouse/condominium market fell from 20 to 15 sales
as the median sales price increased from $160,000 to $205,000.
- For the city of Chandler, the resale market slowed from 710 to 485
recorded sales, while the median sales price increased from $252,105
to $306,000 ($295,000 in April). The townhouse/condominium market
declined from 80 to 50 sales and the median sales price increased
from $135,250 to $186,500.
- The resale market in Tempe decreased from 275 to 210 sales, with the
median sales price increasing to $288,500 ($275,000 in April) from
$236,950 a year ago. The townhouse/condominium sector slowed
from 140 to 100 sales and the median sales price increased from
$150,000 to $198,000.
- The highest median sales price was in Paradise Valley at $2,058,500
with a median square foot house of 4,105 square feet.
- In the West Valley, the following communities represent 9 percent of
the resale market, which is down from the 11 percent of a year ago.
- Avondale fell from 280 to 145 sales with the median price
moving from $226,000 to $260,000 ($260,000 in April).
- El Mirage decreased from 165 to 95 sales, while the median
home price went from $185,700 to $214,950 ($219,900 in
April 2006).
- Goodyear declined from 210 to 125 sales, while the median
price increased from $245,000 to $295,000 ($298,200 in
April).
- Surprise decreased from 465 sales ($231,000) to 275 sales
($256,300), while it was $250,000 in April.
CONTACT(S): Jay Q. Butler, 480/727-1300, jay.butler@asu.edu
Christine Lambrakis, 480/727-1173, 602/316-5616, lambrakis@asu.edu
The Arizona Real Estate Center is associated with School of Applied Arts & Sciences
at Arizona State University's Polytechnic campus. The center
collects and analyzes data concerning real estate in the greater
Phoenix metropolitan area. The center is a comprehensive and objective
source of real estate information for private, public and governmental
agencies. Its director, Dr. Jay Q. Butler, may be reached at (480) 727-
1300 or e-mail him at Jay.Butler@asu.edu.
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