Metro Phoenix’s housing market is slowing and stabilizing.
In July, home sales and prices dipped, prompting housing analyst Mike Orr to repeat that he sees no sign of a bubble-and-bust scenario in the near future.
Sales fell 4.5 percent from June and 18 percent from July 2013. The Valley’s median sales price was $210,000 in July 2014, down $1,000 from the previous month, according to a report from the W.P. Carey School of Business at Arizona State University. A year earlier, the area’s median was $194,000.
“Most of the median-price increase over the last 12 months is because a greater percentage of the homes being sold are in the luxury market, not because home values overall are increasing,” said Orr, director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business.
At the moment, both demand and supply are low in the Phoenix area. A closer look at the area’s housing market beyond overall sales and price numbers from Orr’s latest report:
Supply: Housing inventory is shrinking again. Supply fell 3 percent in July to 24,994. Too many houses on the market in a region with declining sales can push down prices. Last summer, supply was too tight for a healthy market. The number of houses for sale is 36 percent lower now than a year earlier.
High-end houses: In July, 553 houses with price tags of $500,000 or higher sold. That’s flat from June. Luxury sales accounted for about 23 percent of metro Phoenix sales in July, up from 21 percent a year earlier.
Investors: Higher prices have deterred big investors, who snatched up many bargain foreclosure and short-sale houses in 2011-12. Investors were behind 13.6 percent of the area’s sales in July, down from 14.4 percent in June, 27 percent in July 2013 and 40 percent in July 2012.
Short sales: Higher values are helping more struggling homeowners sell without completing a short sale. The number of lender-approved sales for less than what is owed on a house is down 71 percent from a year earlier and accounted for only 3 percent of all Valley sales.
Out-of-state buyers: The number of sales to people living outside of Arizona declined with overall sales. In July, out-of-state buyers were involved in 16.9 percent of all metro Phoenix sales. That compares with 19 percent in June and 17.7 percent in July 2013. Californians are the biggest group of out-of-state buyers, accounting for 4.2 percent of all sales. Canadians are second at 1.9 percent.
Cash buyers: The number of people paying cash for houses instead of financing the purchase with a mortgage has been declining with the number of investment purchases. In July, 20.9 percent of metro Phoenix’s sales were closed with cash, down from 29.3 percent in July 2013.
Catherine Reagor, The Republic | azcentral.com