Arizona Home Search

Login : Register to Get Homes by Email

Phoenix housing market has worst February in 4 years; prices could stay flat in 2014

It was the weakest February in four years for the metro Phoenix housing market, and it’s possible prices may stay flat in 2014.

After a steep plunge and then a dramatic turnaround within that four-year span, this pause in the market could be both disappointing and relieving, depending on your perspective.  The number of homes sold in February (5,398) fell by more than one quarter versus a year ago, while total cash spent in those transactions ($1.4 billion) was down 16 percent, according to Arizona State University’s newest housing report, released today.  This happened despite the fact that buyers had substantially more homes to choose from than they did a year ago.

As of March 1, supply was up by 4 percent from Feb. 1 and by a whopping 58 percent year-over-year, the report said.  As for the Valley’s median single-family home price, that number dipped another 1 percent in February to $195,000. That follows a 4 percent decline in January. It was the first time since 2011 the median price declined for two consecutive months, the report said.  But the typically busy spring buying season, which began last month, may offer a boost, said Michael Orr, the report’s author and housing expert at ASU’s W.P. Carey School of Business.  “The period from March to May is almost always the strongest part of the year for demand, and it is highly probable we will see some upward movement in pricing over the next three months,” Orr said. “However, it’s also likely this advance in pricing will be reversed during the hot summer months of June through September. We may be looking at little to no annual appreciation by the end of the year, if prices behave as we currently expect. Still, the Phoenix market is highly volatile, and nothing is certain.”

Lloyd Fox, designated broker and owner of Phoenix-based The Fox Group at Long Realty Co., said he wouldn’t be surprised if the median price even decreases, but slightly, by year end.  “I think it’s healthy to have a flat market right now … you can’t sit there and think we’re going to go up in double digits (prices) every year. It’s just not sustainable,” Fox said.  Daniel LeClaire, an agent with AZ & Associates, shared that sentiment.  “It was going so crazy this past 1.5 to two years,” and it was a little scary, LeClaire said.  The pause in the market, however, hasn’t been so good for home builders, some of which have been doling out more incentives to entice buyers, Orr said.  New home sales in February rose a modest 1.6 percent from January, but were down 23 percent year-over-year.  Single-family new home permits Valleywide are still way below historic norms, and were even exceeded by multi-family permits in December and February, which Orr said “is very rare.”

Source: Phoenix Business Journal

Speak Your Mind

*

Facebook Auto Publish Powered By : XYZScripts.com