AZ: Overall Market Update
07/09/2007

An update for real estate investors: Greater Phoenix resale market reports best April on record

Although the Greater Phoenix resale home market slowed from 8,779 sales recorded in March to 7,250 in April, it was still well ahead of last year's 6,070 sales. In fact, it was the best April on record, surpassing the previous high of 6,790 sales recorded in April 2002. This brought the 2004 year-to-date total to 26,710 sales, a significant increase compared to 21,100 sales in 2003 and 19,445 sales in 2002.

"Amid recent speculation about the impact of higher mortgage rates on the housing market, some of the recent activity could be attributed to people rushing to take advantage of the current low rates before the opportunity disappears," according to Jay Butler, director of the Arizona Real Estate Center at ASU's W. P. Carey School of Business. "The home-buying appetite seems insatiable, but looming concerns such as the struggling job market could impact the future incomes of owners and buyers alike.

"Since so many home purchases are being financed by adjustable rate mortgages, higher interest rates could jeopardize the ability of some of these homebuyers to retain their homes. Higher rates, combined with stable income and increasing home prices, will adversely impact housing affordability - leading to a potential slowdown in activity. Further, people with low-rate mortgages have little incentive to move and thus to provide additional stimulus to the market."

The record median home price was set in April at $164,000, up from $162,000 in March. This compares to $152,400 in April 2003. Since the Greater Phoenix area is so large, the median price can range significantly - from $97,900 in the Sky Harbor area of Phoenix to $384,000 in North Scottsdale. In April, 43 percent of all recorded sales were for homes priced from $125,000 to $199,999, and 15 percent for homes priced over $300,000.

The resale townhouse/condominium market followed a comparable pattern, with 1,535 sales for April, down from March (1,695 sales), but ahead of last year's 1,420 sales. This brought the year-to-date total to 5,300 sales, compared to 4,640 for 2003 and 4,470 for 2002. The median price rose to a record $112,500, up from $103,500 a year ago.

The median square footage for a single-family home recorded sold in April was 1,680, slightly larger than the 1,660 square feet reported a year ago. In the townhouse/condominium sector, the median square footage was 1,185, slightly smaller than 1,195 square feet reported a year ago.

• Compared to April 2003, recorded sales in Phoenix increased from 1,660 to 1,965 sales in April of this year, while the median sales price increased from $127,500 to $131,250. Since Phoenix is a geographically large city, the median prices can range significantly - for example, $97,900 in the Sky Harbor area and $209,750 in Union Hills. The townhouse/condominium sector declined from 375 to 360 sales, while the median price rose from $92,950 to $102,500.
• The Scottsdale resale home market improved from 605 to 725 recorded sales. The median sales price continued its upward trend, increasing from $322,900 to $365,000. The median resale home price is $394,000 in North Scottsdale and $178,950 in South Scottsdale. The townhouse/condominium sector in Scottsdale improved from 330 to 340 sales, while the median sales price increased from $155,000 to $172,000.
• The Mesa resale housing market grew from 770 to 805 sales, while the median price increased from $135,700 to $150,000. The townhouse/condominium sector improved from 175 to 225 sales, while the median home price rose from $89,250 to $99,000.
• Glendale improved slightly from 525 to 530 sales, and the median price increased from $141,900 to $151,000.The townhouse/condominium sector increased from 45 to 50 sales, while the median sales price rose from $73,015 to $83,000.
• In comparison to a year ago, the Sun City resale market increased from 165 to 210 sales, with the median sales price rising from $114,900 to $132,400. Resale activity in Sun City West declined from 150 to 115 recorded sales, but the median sales price increased from $141,000 to $160,000. The townhouse/condominium market in Sun City declined from 125 to 115 recorded sales, while the median home price increased from $78,250 to $82,000. In Sun City West, sales increased from 40 to 50 sales and the median sales price rose from $100,000 to $121,000.
• The resale market in Gilbert increased from 350 to 405 sales, and the median price rose from $170,000 to $188,890. The townhouse/condominium market slowed from 30 to 20 sales as the median sales price increased from $117,500 to $120,750.
• In Chandler, the resale market declined from 490 to 450 recorded sales, while the median price increased from $158,000 to $168,130. The townhouse/condominium market improved from 65 to 75 sales and the median sales price rose from $107,730 to $114,280.
• The resale market in Tempe improved from 175 to 180 sales, with the median sales price increasing to $174,000 from $167,900. The townhouse/condominium sector improved from 85 to 90 sales, while the median sales price rose from $108,500 to $119,900.
• The highest median sales price was in Paradise Valley at $889,500, with a median square footage of 3,475. In the West Valley, the following communities represent 9 percent of the resale market, compared to 6 percent a year ago. Avondale grew from 80 to 140 sales, with the median price rising from $141,375 to $153,750. El Mirage improved from 30 sales (median price $117,000) to 80 sales ($121,450). Goodyear grew from 70 sales ($164,500) to 140 sales ($174,750). Surprise increased from 180 sales ($140,500) to 270 sales ($154,410).

W. P. Carey School of Business