3 ON YOUR SIDE (3TV) - Valley home prices have gone up nearly 8% over the past year and they’re expected to keep rising through the next year. For sellers like Celia Peña, it’s a good thing.
“Seriously, we had no words. We just looked at each other and we're like, this is really happening,” said Peña.
Peña says she was shocked when she and her husband put their Chandler home up for sale and it sold in two days.
She says that’s a far cry from when they first tried selling their home a few years ago and gave up.
“In 30 days, we had no bites and so we pulled it off two years ago. And two years later, our house is pending,” said Peña.
But some worry that the real estate market may be a little too hot, pushing us into another housing bubble.
It happened more than a decade ago when the demand for houses increased dramatically. When demand fell, the market crashed back in 2008.
“We have been this cyclical economy, and we became known for this boom/bust growth pattern,” said Mark Stapp, a professor in real estate at Arizona State University’s W.P. Carey School of Business.
Currently, Stapp says the housing market is healthy. And, in his opinion, consumers shouldn't worry.
“People fear that we're going to see another housing bubble like we did that began that last recession. I don't see any of that. There are none of those underlying, fundamental characteristics that exist today,” he said.
A decade ago, Stapp says the real estate market shot up too much, too fast.
But currently, he says there's been slow and steady growth pattern over a long period of time, which is good.
One market driver, he says, has been the development and growth of downtowns like the expansion of Arizona State University and the University of Arizona campuses.
“This is where employers now want to come look for employees because this is where employees want to live. Lifestyle, affordability and ease of doing business,” said Stapp.
However, there is a downside to our growth. For example, he says there is a labor shortage in the construction industry, coupled with an increase of material and construction costs. That’s driving up prices.
“It makes building affordable units much more difficult. That's what causing these prices to rise. It's not a bubble as a result of inventory. We're not overbuilding. I think the problem we're having is we aren't building enough, and because of that, we have an affordability issue that is emerging,” said Stapp.
Stapp believes at some point, prices should start to level out.
But, for now, housing prices continue going up. And, for people like Peña, who are selling their home, that works out well for them.
“I only think it's gonna get better and the housing market around here is gonna keep going up higher,” said Peña.
And if you’re in the market to purchase a home, interest rates for a 30-year fix have recently dropped, and are hovering right around 4%.