State Housing Market Still Continues to Search for Bottom
Phoenix, AZ – The Federal Housing Finance Agency tracks the sale and refinancing of the same properties over a long period of time to find the trends. The latest report shows that prices overall declined by nearly 15 percent between last quarter and the same period a year earlier. What that means is the average home in the state is worth just HALF of what it was five years earlier. Economist Marshall Vest of the University of Arizona said the current conditions do not suggest a turnaround in anywhere in sight, especially with the glut of available homes.
(In fact, we have enough vacant houses here in the state of Arizona to accommodate an entire decade worth of population growth. And that's if population were growing.)
Jay Butler of Arizona State University said one reason prices continue to plummet is that the only properties that are selling right now are investment properties -- rentals and cheap homes.
(So that just keeps the lid on any appreciation and just keeps on forcing prices down even further, because that's what's being sold. If you're trying to sell your own home, and you're probably under water, you just can't do it. And there's no pent-up demand at the moment for a move-up market so there's nothing to accelerate any appreciation.)
Butler said prices will not hit bottom until OTHER things occur in the economy. That includes creating more jobs and paying more money to those who are already employed.
(And with all the issues, with the debt and everything else, there's no consumer confidence out there. So the environment of the housing market really has to improve before the housing market is going to even begin to improve. They can't improve separately from the economic environment. And right now, it sucks.)
The worst numbers are in the Phoenix area. But the picture is only somewhat brighter in Pima, Mohave and Yavapai counties. And even in the Flagstaff area, which saw only an 8 percent year-over-year drop, home values are nearly 30 percent less than five years ago. For Arizona Public Radio this is Howard Fischer.