Word on the street is that home prices are surging in metro Phoenix. According to the W.P. Carey School of business at Arizona State University (ASU), the median price of a house in the area went up to $134,900, with an increase of 8 percent in March alone. Overall, prices have gone up 20 percent in the past year. This is expected to continue but not quite as rapidly.
Mike Orr, director of the Center for Real Estate Theory at ASU, doesn’t think home prices will continue to climb as fast as they did in March over the next few months. However, he notes that housing appreciation in Phoenix for 2012 will likely reach 25 percent by September. Orr credits the turnaround to major drops in foreclosures and in the number of homes for sale, along with an increase in sales. The number of homes lenders took back in metro Phoenix is down 60 percent from March 2011.
Housing inventory has dropped steadily during the past year due to the barrage of investors taking advantage of the market. Actual home sales increased 35 percent since year ago as typical buyers have joined investors in the mix.
Prices have begun to rise at a fast pace, and bargains are no longer plentiful,” Orr said. “Most homes that are priced well are attracting multiple offers within a couple of days, and many are exceeding the asking price.”
March’s price increase was the sixth in a row for the Phoenix housing market. Most real-estate analysts say the streak of rising home prices, along with slower foreclosures, is proof that a housing recovery has begun! More and more national analysts say the metro Phoenix area is leading the U.S.’ housing market recovery.
Bottom line is, plenty of interested buyers and not enough inventory. Makes sense to me. We should start seeing prices increase as demand is there but the inventory can’t meet the demand. So as has been the case over the last few years – we all expect it to change and now are even starting to see the market changing so while a recovery is inevitable, it’s just a matter of when. Looks like we may see it sooner than later!