As the housing market continues to slow, we see that some markets are fairing much better than others.
And it seem as though the areas that grew the most, the fastest are the ones that are feeling the worst effects of our nation’s slowing market.
Phoenix is one such area. This bustling desert city was one of the fastest growing cities in the United States, and their numbers during the housing boom definitely prove it.
But now, as their market in particular starts to cool, we are seeing home sales slow and prices start to go down.
This is due in part because home values in the area rose significantly in a very short amount of time, and now things are starting to come back down to reality.
According to an October 12, 2006 article by The Associated Press and featured in The Arizona Daily Star, “Cost of Phoenix homes drop as sales slow,” that particular market is not fairing so hot (especially in comparison to their scorching temperatures).
First comes the bad news about pricing:
“The median price for a resale home in metropolitan Phoenix fell in September for the first time in a decade, another sign that the region’s housing market continues to slow.”
In September, the median resale home price in Phoenix was $256,900. This number is quite down from last year’s robust $263,000.
And that isn’t the only thing that is negatively affecting Phoenix’s housing market, sales of homes are also down drastically compared to even just a year ago.
“Only half the number of homes sold last month as the same month a year earlier, according to a monthly report by the Arizona Real Estate Center at Arizona State University Polytechnic. Just 4,875 homes sold in the month, down from 9,815 a year earlier. That’s the lowest monthly total since February, 2003.”
One of the main reasons why sales are down is because buyers are waiting on the sidelines in hopes that prices are going to drop further; many are just unsure of what to do, so they are playing it safe and not doing anything.
“‘A lot of it is the buyers aren’t out there,’ said Jay Butler, director of the Arizona Real Estate Center. ‘The days of the big (price) increases are gone, at least for a while, so the buyer is very cautious about what they’re going to do.’ The slowdown has caught some sellers short, forcing price reductions that still don’t attract buyers.”
The slow sales are also causing many Arizona homeowners to offer incentives to lure-in potential buyers.
“‘It’s so depressing and frustrating because I probably am like 20,000 other people out there,’ said Craig Bohall, who cut the price on his family’s Mesa home and offered other incentives, such as a trip to Hawaii, but still hasn’t had a buyer step up. ‘You have a beautiful home, there’s nothing wrong with it, but there just aren’t any buyers.’”
As this once robust market continues to correct itself, sellers will just have to become more creative to lure-in buyers; and will hopefully not have to lower prices any further.