TEMPE, Ariz. -- The Valley housing market could end the year without a price increase, according to a new report from Arizona State University.
Research by ASU’s W.P. Carey School of Business found that the sale price in February for a median single-family home in Maricopa and Pinal counties fell from January. It is the second month in a row that prices have fallen and the first time the market has seen back-to-back monthly drops since 2011
If price behavior continues as expected, researchers said, there could be little to no price growth by the end of the year.
The median price of $195,000 was the lowest since August, researchers said. Prices started to rise after hitting a low point in September 2011, but increases started to slow last July before prices fell by a total of 5 percent the first two months of 2014.
The price of $195,000 is still up by about 15 percent from February 2013, according to the report, but low demand has stalled the number of sales.
"Home-sales activity was a startling 26 percent below February 2013,” Mike Orr, the author of the report, said in a statement. "Despite the large price gains since last year, the total dollars spent on homes dropped 16 percent between last February and this February. This is the weakest February in four years."
Orr, the director of the Center for Real Estate Theory and Practice at W. P. Carey, said that despite a loss of investor confidence, the number of foreclosures this February was cut in half compared with February 2013.
More developers are focusing on multi-family options, he said, with the number of permits for multi-family housing exceeding those for single-family in February. The rental market for single-family homes is also doing well, particularly among millenials and those who have lost homes to forclosure.
The market’s future is still uncertain, Orr added. The period between March and May is typically the strongest time of the year for demand in housing, but any gains could be lost during the summer.