Housing prices leveling off this summer

By Christina Samspon

June 27, 2012 - 3:57 pm
Housing prices leveling off in Maricopa.

The Maricopa housing market continues to reflect Valleywide trends, said Mike Orr, director of the Center for Real Estate Theory and Practice at Arizona State University’s W.P. Carey School of Business.

According to a report released Wednesday by the ASU business school, between May 2011 and May this year, the median price of a single-family home in Pinal and Maricopa counties increased 32.4 percent, from $111,000 to $147,000. The median townhouse/condominium prices increased even more, 37.3 percent, bringing prices up to $96,000 from $69,000.

In Maricopa for May this year, there were 207 recorded single-family home sales. The median sale price for those homes was $115,400, an average price of $54.78 per square foot. In May 2011 Maricopa had 326 recorded single-family home sales and the median sale price for those homes was $82,000, an average price of $40.94 per square foot.

But even though home prices have continued to increase overall since September, in part because the housing supply is limited, prices are gradually beginning to level off, a trend Orr said is likely to continue throughout the summer months. 

“Just looking at Maricopa, the supply has been gradually moving up and lowering pressure on prices,” Orr said.

In part, the market simply can’t sustain such a rapid increase in prices perpetually.

“You can’t carry on with prices going up 5 percent a month,” Orr said. 

Still, Maricopa is listed by the business school as one of the areas seeing the largest surge in prices. 

Another area in which Maricopa reflects the regional market is the number of investors purchasing homes.

According to the W.P. Carey report, 28 percent of the home purchases in May were made by investors. 

“Maricopa is still attracting investors,” Orr said. “But now you’re getting the really big investors coming in.” 

The increased competition with investors over homes has resulted, both regionally and locally, with an increase in new homes being purchased.

From May of last year, regional new home sales increased 57 percent as interested buyers found building a new home to be the only affordable alternative to purchasing an existing home costing $250,000 or less.

Foreclosures during the year decreased by 52 percent, although there was a slight uptick the past month. 

Foreclosures between April and May this year for single-family homes and townhomes combined increased 18 percent in the two counties.

But that increase is partially attributed to a legal agreement that the nation’s five largest lenders and the states have signed.

Click here to read the full report. 

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