Phoenix area home prices on the rise, more supply needed

Phoenix area home prices on the rise, more supply needed

Credit: Getty Images

MARICOPA, AZ - FEBRUARY 25: A bank owned sign hangs outside a foreclosed home February 25, 2009 in Maricopa, Arizona. Maricopa, AZ was one of the fastest growing towns in America until vast unemployment and the real estate bust swept through the country. Now, approximately 75 percent of residents owe more money on their mortgages than their homes are actually worth. (Photo by Joshua Lott/Getty Images)

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by Andrew Michalscheck

azfamily.com

Posted on May 31, 2012 at 3:35 PM

Updated Thursday, May 31 at 3:42 PM

PHOENIX -- Home owners in the Phoenix metropolitan area are receiving some good news about the value of Valley real estate.

A new report from the W.P. Carey School of Business at Arizona State University has revealed that the median single-family home price in the Phoenix area increased by 25 percent -- from $112,000 to $140,000 -- between April 2011 and April 2012.

However, the report also revealed that the real estate market could experience even more activity if there were more homes on the market.

“April is normally a very busy month for home sales, but this year’s sales are weaker than last year’s due to the unusual lack of supply,” said Mike Orr, director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business.

The number of single-family homes sold in April was down 11.5 percent from April 2011.

Sales of homes owned by banks, Fannie Mae, Freddie Mac and the government have also decreased. From April to April, the sale of "distressed supply" dropped by 81 percent.

Orr said there are currently just under 9,000 single-family homes for sale in the Valley, but more than 25 percent of the houses are priced at more than $500,000.

Areas such as El Mirage, Maricopa and Glendale suffered the most during the recession, but are now experiencing the biggest price increases. Conversely, areas like Cave Creek and Fountain Hills that suffered the least from foreclosures are seeing a decrease in prices.

Foreclosures in the Phoenix area are down 62 percent from last April. There has, however, been a 4.7 percent increase in foreclosure starts, which is when homeowners receive notice that their lender may foreclose in 90 days.

“In order for us to see a more stable housing recovery, the basic rules of economics require prices to change enough to bring a new wave of sellers onto the market,” Orr added. “That hasn’t happened yet, and so far, supply remains insufficient to meet demand.”

 

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